Court Opinion

ID: 9444363
Source: CourtListenerOpinion
Date Created: 2023-08-03 20:58:03.095938+00
Date Added: 2024-06-11T17:29:50.074946
License: Public Domain

CHAMBERS, Circuit Judge
(concurring in part and dissenting in part).
I think, as to the ordinary income or capital gains question, under the evidence the Tax Court would have been justified in finding that the property either was or was not “property used in the trade or business of the taxpayer” and “held by the taxpayer primarily for sale to customers in the ordinary course of his trade or business.” We should not disturb the finding on this question reached upon competent evidence.
On the question of whether the Tax Court was correct in its conclusion that the transaction by which Rough and' Ready Island went into Stockton Harbor Industrial Company was a tax free reorganization, I dissent from the majority opinion. While I attach no importance to the collateral transaction of the simultaneous loan made by a stockholder of the new company to Lindley Patrick Farms, Inc., I do think the manner of handling the cash payment through escrow to pay up delinquencies on the mortgage on the property for the account of Lindley Patrick Farms, Inc., spoils the reorganization as a tax free reorganization, and that upon reorganization Rough and Ready Island was entitled to a new tax basis for the computation of gain.