Court Opinion

ID: 9636924
Source: CourtListenerOpinion
Date Created: 2023-08-22 14:49:46.442666+00
Date Added: 2024-06-11T18:09:51.419480
License: Public Domain

MILLER, Circuit Judge
(dissenting, in part).
I am of the opinion that the transaction in 1934 was not one within the provisions of Sections 112(b) (3), 112(b) (4) or 112(b) (5) of the Revenue Act of 1932, which is the applicable statute.
'Both Sections 112(b) (3) and 112(b) (4) require that there be a “reorganization” in order for the provisions thereof to be applicable. The transaction does not qualify as a “reorganization” under Section 112(d) of the Act, in that neither the old corporation nor its stockholders were, immediately after the transfer, in control of the new corporation to which the assets were transferred. The creditors of the old corporation, not its stockholders, received the controlling stock of the new corporation. Helvering v. Southwest Consolidated Corp., 315 U.S. 194, 62 S.Ct. 546, 86 L.Ed. 789. See also Helvering v. Alabama Asphaltic Limestone Co., 315 U.S. 179, 183, 184, 62 S.Ct. 540, 86 L.Ed. 775; Adamston Flat Glass Co. v. Commissioner, 4 Cir., 162 F.2d 875; Mascot Stove Co. v. Commissioner, 6 Cir., 120 F.2d 153, 155, 156; Templeton’s Jewelers v. United States, 6 Cir., 126 F.2d 251.
Although I am not in agreement with •the statement in the Court’s opinion that the taxpayer exchanged property solely for stock or securities, yet the ruling on the point involved appears supported by Section 213(f) (1) of the Revenue Act of 1939, 26 U.S.C.A.Int.Rev.Acts, page 1177, which was made retroactive to a time prior to the transaction in question.
I am in accord with the conclusions of the Tax Court (8 T.C. 467) with respect to the non-applicability of Section 112 (b) (5).
The foregoing makes it unnecessary to consider other questions raised and ruled upon in the Court’s opinion in its interpretation of these sections of the statute.