Kass v. Commissioner
United States Tax Court
As part of an integrated plan, TRACK, which was organized and controlled by a group owning 10.23 percent of ACRA's stock, purchased 83.95 percent of ACRA's stock and then merged ACRA into itself. Petitioner is one of 5.82 percent of ACRA's stockholders who did not sell their stock to TRACK. Upon the statutory merger of ACRA into TRACK, she received shares of TRACK in exchange for her shares of ACRA on a 1-for-1 basis.
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As part of an integrated plan, TRACK, which was organized and controlled by a group owning 10.23 percent of ACRA's stock, purchased 83.95 percent of ACRA's stock and then merged ACRA into itself. Petitioner is one of 5.82 percent of ACRA's stockholders who did not sell their stock to TRACK. Upon the statutory merger of ACRA into TRACK, she received shares of TRACK in exchange for her shares of ACRA on a 1-for-1 basis. Held: Petitioner must recognize gain realized as a result of the exchange. Where the parent's purchase of stock in its subsidiary is prearranged in relation to the subsequent…
1Opinion of the Court
OPINION
Dawson, Judge:
Respondent determined a deficiency in petitioner’s Federal income tax for the year 1966 in the amount of $10,131.67.
The only issue for decision is whether petitioner, a minority shareholder of an 81-percent-owned subsidiary, must recognize gain upon the receipt of the parent’s stock pursuant to a statutory merger of the subsidiary into the parent.
This case was submitted under Rule 30, Tax Court Rules of Practice. The facts are fully stipulated. We adopt the stipulation of the parties and the exhibits attached thereto as our findings. The pertinent facts are summarized…
2Cases cited9 opinions
- Helvering v. Minnesota Tea Co.Supreme Court of the United States · 1935
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