Edison Bros. Stores, Inc. v. Commissioner
United States Board of Tax Appeals
1. In the sale, in 1935, to certain of its employees, at a price in excess of cost, of shares of its own stock, reacquired for that purpose, petitioner is held to have realized no taxable gain.
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1. In the sale, in 1935, to certain of its employees, at a price in excess of cost, of shares of its own stock, reacquired for that purpose, petitioner is held to have realized no taxable gain. National Home Owners Service Corporation,39 B.T.A. 753; and R. C. Reynolds, Inc.,44 B.T.A. 356, followed; held, further, that with respect to similar sales by petitioner in 1937, the gain realized is subject to tax, Trinity Corporation,44 B.T.A. 1219; and Brown Shoe Co.,45 B.T.A. 212, followed. 2. Where petitioner in 1935 paid an indebtedness of $3,000 for services rendered it in carrying on business,…
1Opinion of the Court
OPINION.
Leech:
These proceedings, consolidated for hearing, involve deficiencies in income tax for the years 1935 and 1937 in the amounts of $1,553.74 and $10,312.15, respectively. Petitioner is claiming an overpayment in 1935 in the amount of $673.75. The issues are (1) *473whether petitioner realized taxable income from the sale of its own stock to its employees in 1935 and 1937; (2) whether it is entitled to a deduction in 1935 for the payment of a debt with its own stock based on the cost of such stock to petitioner or on the fair market value thereof at the time of the payment of the…
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