First Nat'l Bank v. Commissioner
United States Board of Tax Appeals
Under a plan of reorganization, holders of bonds in a corporation, a party to reorganization, were entitled to exchange such bonds for preferred stock in another corporation, a party to the reorganization, and the right to purchase sufficient additional preferred stock at less than market value to bring the face value of stock received on exchange and on exercise of the right up to the face value of bonds exchanged.
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Under a plan of reorganization, holders of bonds in a corporation, a party to reorganization, were entitled to exchange such bonds for preferred stock in another corporation, a party to the reorganization, and the right to purchase sufficient additional preferred stock at less than market value to bring the face value of stock received on exchange and on exercise of the right up to the face value of bonds exchanged. Held that no loss resulted on exchange of bonds and exercise of the right by paying additional amount.
1Opinion of the Court
*420OPINION.
Matthews :
This case arises under the Revenue Act of 1926. The respondent contends that under section 203(b)2, no gain or loss is recognized on the exchange of bonds for preferred stock. The petitioner contends that the provisions of the act applicable to the situation are sections 202(c), 202(d), and 203(b)l. The provisions relied on by petitioner and respondent, and other pertinent portions of sections 202 and 203, read as follows:
Seo. 202. (a) Except as hereinafter provided in this section, the gain from the sale or other disposition of property shall be the excess of the amount…
2Cited by13 opinions
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- Hamilton v. CommissionerUnited States Board of Tax Appeals · 1934
- Fifth Ave. Bank v. CommissionerUnited States Board of Tax Appeals · 1934
- Muchnic v. CommissionerUnited States Board of Tax Appeals · 1933
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