Abraham Winer v. Commissioner of Internal Revenue

COFFIN, Circuit Judge.

The principal question posed by this petition for review is whether a corporation, which disposes of its inventory, pursuant to a plan of liquidation, in a non-taxable bulk sale under section 337 of the Internal Revenue Code, 1 can compute its cost of goods sold for income tax purposes on the assumption that ending inventory for the year of the bulk sale is zero. To put the question in terms of legal result: can section 337, which is devised to eliminate double taxation in the event of sale of a corporation’s property and distribution of the proceeds to shareholders in…