Edwards v. Commissioner
United States Tax Court
In 1962, petitioners purchased stock and notes of a corporation for $ 75,000. The purchase contract allocated $ 5,000 to the stock and $ 70,000 to the notes. Held, amounts received by petitioners from the corporation on the principal of the notes did not constitute amounts received in exchange for such notes under sec. 1232(a), I.R.C. 1954.
1DissentFeatheRSTON, J.
Code section 1232(a)(1) provides that amounts received by the “holder” on the retirement of evidences of indebtedness, including notes, “shall be considered as amounts received in exchange therefor” if such evidences of indebtedness are “capital assets in the hands of the taxpayer.” As a result of the June 15, 1962, transaction between petitioners and Ovid Birmingham, petitioners became holders of the Birmingham Steel notes which, the majority concedes, were evidence of bona fide debts in Ovid’s hands. Such notes were capital assets in the hands of petitioners. Accordingly, as I view this…
2Cases cited14 opinions
- John Kelley Co. v. CommissionerSupreme Court of the United States · 1946
- Kimbell-Diamond Milling Co. v. Comm'rUnited States Tax Court · 1950
- Kimbell-Diamond Milling Co. v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1951
- John v. Rowan v. United StatesCourt of Appeals for the Fifth Circuit · 1955
- Kraft Foods Company v. Commissioner of Internal Revenue, (Two Cases)Court of Appeals for the Second Circuit · 1956
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