Feathers v. Commissioner
United States Tax Court
The petitioner made payments to a bank, the purpose being to use the money, if necessary, to pay depositors in liquidation proceedings. The arrangement was to be effective until in the opinion of the state superintendent of banks the financial condition of the bank increased sufficiently to protect the depositors.
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The petitioner made payments to a bank, the purpose being to use the money, if necessary, to pay depositors in liquidation proceedings. The arrangement was to be effective until in the opinion of the state superintendent of banks the financial condition of the bank increased sufficiently to protect the depositors. Subsequently the funds were by petitioner's authority used as collateral for payment of debenture bonds of the bank and such security was to continue until released by the bondholder. Subsequently, in a recapitalization of the bank, the rights of petitioner to a return of her…
1Opinion of the Court
OPINION.
Disney, Judge:
The point of difference now between the parties is the cost basis of the “B” preferred stock sold by the petitioner in each of the taxable years. The petitioner contends, in effect, that she acquired the stock for cash at $35.50 a share in connection with the recapitalization of the bank. The respondent’s position is that the petitioner exchanged her rights in the contribution of $55,000 she made to the bank for the stock in a taxable transaction and, that accordingly, the petitioner's basis is the fair market value of the stock at the time of the exchange.
The parties…
2Cases cited3 opinions
- Burnet v. HoustonSupreme Court of the United States · 1931
- Pancoast Hotel Co. v. CommissionerUnited States Tax Court · 1943
- Clay Drilling Co. v. CommissionerUnited States Tax Court · 1946
3Cited by5 opinions
- Philadelphia Park Amusement Co. v. United StatesUnited States Court of Claims · 1954
- Federal Nat'l Bank v. CommissionerUnited States Tax Court · 1951
- Estate of Rogers v. CommissionerUnited States Tax Court · 1970
- Feathers v. CommissionerUnited States Tax Court · 1947
- Federal Nat'l Bank v. CommissionerUnited States Tax Court · 1951