Meagher v. Commissioner
United States Board of Tax Appeals
GAIN OR LOSS - EXCHANGE - INSTALLMENT OBLIGATIONS. - Petitioner, doing business as a sole proprietor, to a large extent on the installment basis, organized a corporation to which he transferred in 1923 all of the assets of the business for all of its authorized capital stock.
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GAIN OR LOSS - EXCHANGE - INSTALLMENT OBLIGATIONS. - Petitioner, doing business as a sole proprietor, to a large extent on the installment basis, organized a corporation to which he transferred in 1923 all of the assets of the business for all of its authorized capital stock. Included in the assets conveyed were $117,863.13 of uncollected installment obligations representing unrealized profits of $53,488.57. Held that the transfer of these installment obligations, being a transaction provided by section 202(c)(3) of the Revenue Act of 1921 not giving rise to gain or loss, respondent erred in…
1Opinion of the Court
*70OPINION.
Trussell:
The issue presented in this proceeding is one of law, there appearing to be no dispute as to the facts in connection with the transaction or in respect to the figures and amounts involved.
It is admitted by respondent that the transfer of these assets by petitioner was one which, under the provisions of section 202 (c) (3) of the Revenue Act of 1921, gave rise to neither gain nor loss. However, he contends that in this transfer the disposal of installment obligations which, had they been retained and not disposed of by petitioner, would not have represented income until…
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