Intermountain Lumber Co. & Subsidiaries, etc. v. Commissioner
United States Tax Court
An incorporator irrevocably contracted, as part of the incorporation transaction, to sell to a third party 50 percent of the stock the incorporator received in exchange for his transfer to the corporation of all its property. Held, the incorporator did not "control," within the meaning of sec. 368(c), I.R.C. 1954, the requisite percentage of stock immediately after the exchange for the incorporation to be a tax-free exchange under sec. 351(a), I.R.C. 1954.
1Opinion of the Court
OPINION
Section 351 provides, in part, that no gain shall be recognized if property is transferred to a corporation by one or more persons solely in exchange for stock or securities in such corporation and immediately after the exchange such person or persons are in control of the corporation.2 “Control” is defined for this purpose in section 368(c) as ownership of stock possessing at least 80 percent of the total combined voting power of all classes of stock entitled to vote and at least 80 percent of the total number of shares of all other classes of stock of the corporation.3
In this case,…
2Cases cited12 opinions
- American Bantam Car Co. v. CommissionerUnited States Tax Court · 1948
- Bassick v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1936
- Wilgard Realty Co. v. Commissioner of Internal Rev.Court of Appeals for the Second Circuit · 1942
- Commissioner of Int. Rev. v. Schumacher Wall Bd. Corp.Court of Appeals for the Ninth Circuit · 1937
- Barker v. United StatesCourt of Appeals for the Ninth Circuit · 1953
7 more not listed; retrieve them via the Exa API.
3Cited by7 opinions
- Berry Petroleum Co. v. CommissionerUnited States Tax Court · 1995
- D'Angelo Assoc., Inc. v. CommissionerUnited States Tax Court · 1978
- McDonald's of Zion, 432, Ill., Inc. v. CommissionerUnited States Tax Court · 1981
- Berry Petroleum Co. v. CommissionerUnited States Tax Court · 1995
- D'Angelo Assoc., Inc. v. CommissionerUnited States Tax Court · 1978
2 more not listed; retrieve them via the Exa API.