Court Opinion

ID: 9650988
Source: CourtListenerOpinion
Date Created: 2023-08-23 16:00:00.650967+00
Date Added: 2024-06-11T18:12:28.425975
License: Public Domain

ALSCHULER, Circuit Judge.
I concur, in this opinion.
Section 331 was drawn to meet “reorganization, consolidation, or change of ownership of a trade or business, or change of ownership of property, after March 3,1917.” The form of ownership is immaterial. It may be *419individual, partnership, or corporate. To my mind the evident intent o£ the section is, that if, after any such change, any person or persons, singly or collectively, shall hold in the reorganized business as much as 50 per cent, of the entire interest or control therein, and are the same person or persons who, singly or collectively, held as much as 50 per cent, interest or control in the old business, the reorganized business shall not, for.the purpose of determining invested capital, be allowed a greater value on any of its assets than would have been allowed, upon the same assets, to the old business had there been no reorganization.
Here not only 50 per cent., but the entire ownership — and so the entire control or interest in the consolidated business — is in the same persons, and in none others, as was the entire interest and control in the old business.
It follows that, for the purposes of the Revenue Act of 1918, section 331 precludes to the reorganized corporation a capitalization different from that which would have been permissible to the old corporation had this reorganization not taken place.