McKinney v. Commissioner
United States Board of Tax Appeals
The petitioner as a residuary legatee acquired certain oil and gas leases which, with a small amount of cash, were later transferred to a corporation for all of its capital stock. After acquisition and prior to transfer to the corporation oil had been discovered on one of the leases, so that at the time exchanged for stock it had a fair market value greatly in excess of such value when acquired by the petitioner.
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The petitioner as a residuary legatee acquired certain oil and gas leases which, with a small amount of cash, were later transferred to a corporation for all of its capital stock. After acquisition and prior to transfer to the corporation oil had been discovered on one of the leases, so that at the time exchanged for stock it had a fair market value greatly in excess of such value when acquired by the petitioner. Held, that the cost of these leases to the corporation was the fair market value of the stock paid therefor, and, there being no other method of measuring such value, the fair market…
1Opinion of the Court
*452OPINION.
Turner:
The first issue is disposed of by the last paragraph in our findings of fact, and a recomputation of tax, in so far as this issue is concerned, can be made under Rule 50.
The second issue presents a more difficult question. In 1927 the J ohneda Oil Co. made a distribution to the petitioner, its sole stockholder, in the sum of $165,519.20. She included $78,400 of this amount in her return. Whether it was returned as dividends subject to surtax only, or as ordinary gain subject to both surtax and normal tax, is not shown. The respondent, in his determination, treated $140,449.35…
2Cited by16 opinions
- Pittsburgh Terminal Corp. v. CommissionerUnited States Tax Court · 1973
- Tex-Penn Oil Co. v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 1936
- Commissioner of Internal Revenue v. McKinneyCourt of Appeals for the Tenth Circuit · 1937
- Wheeler v. CommissionerCourt of Appeals for the Ninth Circuit · 1944
- Commissioner of Internal Revenue v. Shenandoah Co.Court of Appeals for the Fifth Circuit · 1943
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