United States v. Hendler

delivered the opinion of the Court..The Revenue Act of 1928 1 imposed a tax upon the annual “net income” of corporations. It defined “net income” as “gross income . . . less the deductions allowed . . . and “gross income” as including “gains, profits and income derived from . . . trades ... or sales, or dealings in property, ... or gains or profits and income . . . from any source whatever.” 2

Section 112 of the Act 3 exempts certain gains which are realized from a “reorganization” similar to, or in the nature of, a corporate merger or consolidation. Under this section, such gains are not…