Haass v. Commissioner
United States Board of Tax Appeals
A corporation and its stockholders agreed upon a plan to procure additional working capital for the corporation, which involved a surrender of 75 percent of outstanding stock by the stockholders, an amendment of the corporate charter to provide for class A and class B stock in place of the old preferred and common, the issuance of 25 percent of new stock for 25 percent of old retained by stockholders, and the purchase of new stock by certain stockholders.
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A corporation and its stockholders agreed upon a plan to procure additional working capital for the corporation, which involved a surrender of 75 percent of outstanding stock by the stockholders, an amendment of the corporate charter to provide for class A and class B stock in place of the old preferred and common, the issuance of 25 percent of new stock for 25 percent of old retained by stockholders, and the purchase of new stock by certain stockholders. Petitioner surrendered 75 percent of his stock and claimed a loss equal to the cost of the stock surrendered. Held, that under the plan as…
1Opinion of the Court
*903OPINION.
Adams: The petitioner contends that since his proportionate interest in the company was changed as a result of the consummation of the plan outlined, he has sustained “ a loss equal to the cost to him of the two-thirds of his original stock given to new capital, plus the proportion of the cost of the one-twelfth of his original stock surrendered to the Company’s treasurer which the stock issued for the new capital bore to the outstanding stock of the Company after the transaction, less the increment to the value of his retained stock by reason of the addition of the new capital.”…
2Cases cited7 opinions
- Burdick v. CommissionerUnited States Board of Tax Appeals · 1930
- Wright v. CommissionerUnited States Board of Tax Appeals · 1929
- Haft v. CommissionerUnited States Board of Tax Appeals · 1930
- City Builders Finance Co. v. CommissionerUnited States Board of Tax Appeals · 1930
- Fredericks v. CommissionerUnited States Board of Tax Appeals · 1930
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3Cited by4 opinions
- United Gas Improvement Co. v. Commissioner of Int. Rev.Court of Appeals for the Third Circuit · 1944
- Fischer v. CommissionerUnited States Board of Tax Appeals · 1942
- Haass v. CommissionerUnited States Board of Tax Appeals · 1934
- Souther v. CommissionerUnited States Board of Tax Appeals · 1939