Morgan v. Comm'r of Internal Revenue

10 Citing cases

  1. Warsaw Photographic Assocs., Inc. v. Comm'r of Internal Revenue

    84 T.C. 3 (U.S.T.C. 1985)   Cited 4 times

    We believe petitioner's reliance on the cases it cites is misplaced. In Commissioner v. Morgan, supra, the Court of Appeals for the Third Circuit reversed this Court (33 T.C. 30 (1959)), holding that an actual transfer and distribution of the transferee corporation's stock ‘would have been a meaningless gesture‘ in that case, since one individual held a11 the stock in both the transferor corporation and the transferee corporation (288 F.2d at 680, see 33 T.C. at 32). In South Texas Rice Warehouse Co. v. Commissioner, supra, we rejected the taxpayers' contention that a transaction did not qualify as a D reorganization because no stock was transferred and distributed.

  2. Lessinger v. Comm'r of Internal Revenue

    85 T.C. 824 (U.S.T.C. 1985)

    The view that an exchange of stock is a meaningless gesture where the proportionate ownership of the transferor and transferee is identical has been adopted by this Court and others in the context of determining whether a liquidation and subsequent reincorporation of corporate assets is in actuality a reorganization. In Commissioner v. Morgan, 288 F.2d 676 (3d Cir. 1961), revg. 33 T.C. 30 (1959), the taxpayer was the sole shareholder of the transferor and the transferee corporations. The transferor was liquidated and the operating assets were conveyed to the transferee who performed identical services as the transferor.

  3. Int'l Tel. v. Comm'r of Internal Revenue

    77 T.C. 60 (U.S.T.C. 1981)

    In light of the foregoing, we have no need to delve into the question of the applicability of section 351 to a contribution to capital where no stock or securities are received in exchange. Compare Abegg v. Commissioner, 50 T.C. 145, 160-163 (1968), affd. on other grounds 429 F.2d 1209, 1215-1218 (2d Cir. 1970), with Commissioner v. Morgan, 288 F.2d 676, 680 (3d Cir. 1961), revg. 33 T.C. 30 (1959), and South Texas Rice Warehouse Co. v. Commissioner, 43 T.C. 540, 569 (1965), affd. on this issue sub nom. Davant v. Commissioner, 366 F.2d 874, 886-887 (5th Cir. 1966).

  4. Capital Sales, Inc. v. Commissioner

    71 T.C. 416 (U.S.T.C. 1978)

    Clearly, the circumstances herein do not place American-Standard in a sufficiently arm's-length status to avoid the application of the analysis articulated in DeGroff v. Commissioner, supra, and the conclusion that Sales transferred the American-Standard franchise to Supply. See also Commissioner v. Morgan, 288 F.2d 676 (3d Cir. 1961), revg. and remanding 33 T.C. 30 (1959). In sum, the steps taken herein were sufficiently related so that, in total, they amounted to a transfer by one corporation (Sales) of substantially all of its assets to another corporation (Supply) controlled by the shareholders of the transferor, followed by a liquidation of the transferor corporation.

  5. Capital Sales, Inc. v. Comm'r of Internal Revenue

    71 T.C. 416 (U.S.T.C. 1978)

    Clearly, the circumstances herein do not place American-Standard in a sufficiently arm's-length status to avoid the application of the analysis articulated in DeGroff v. Commissioner, supra, and the conclusion that Sales transferred the American-Standard franchise to Supply. See also Commissioner v. Morgan, 288 F.2d 676 (3d Cir. 1961), revg. and remanding 33 T.C. 30 (1959). In sum, the steps taken herein were sufficiently related so that, in total, they amounted to a transfer by one corporation (Sales) of substantially all of its assets to another corporation (Supply) controlled by the shareholders of the transferor, followed by a liquidation of the transferor corporation.

  6. South Texas Rice Warehouse Co. v. Comm'r of Internal Revenue

    43 T.C. 540 (U.S.T.C. 1965)

    Petitioners' primary argument that the transaction here involved does not fall within section 368(a)(1)(D) is that no stock was issued by Water Co. to either Warehouse or the stockholders of Warehouse in return for the assets, but the transaction was altogether a sale of the assets by Warehouse to Water Co. Petitioners answer respondent's argument that under the decision of the Court of Appeals in Commissioner v. Morgan, 288 F.2d 676 (C.A. 3, 1961), reversing 33 T.C. 30, certiorari denied 368 U.S. 836 (1961), it is unnecessary that actual stock be issued where the stockholders in each of the two corporations are identical with identical interests so that the issuance of additional stock would be a meaningless gesture by contending that the Court of Appeals erred in its decision in the Morgan case. Petitioners argue that in any event the facts here are distinguishable from those in the Morgan case since in Commissioner v. Morgan, supra, the assets which were necessary to engage in the same business which the transferor had engaged in prior to the transfer were received by the transferee without any consideration.

  7. South Texas Rice Warehouse Co. v. Commissioner

    43 T.C. 540 (U.S.T.C. 1965)

    Petitioners' primary argument that the transaction here involved does not fall within section 368(a)(1)(D) is that no stock was issued by Water Co. to either Warehouse or the stockholders of Warehouse in return for the assets, but the transaction was altogether a sale of the assets by Warehouse to Water Co. Petitioners answer respondent's argument that under the decision of the Court of Appeals in Commissioner v. Morgan, 288 F.2d 676 (C.A. 3, 1961), reversing 33 T.C. 30, certiorari denied 368 U.S. 836 (1961), it is unnecessary that actual stock be issued where the stockholders in each of the two corporations are identical with identical interests so that the issuance of additional stock would be a meaningless gesture by contending that the Court of Appeals erred in its decision in the Morgan case. Petitioners argue that in any event the facts here are distinguishable from those in the Morgan case since in Commissioner v. Morgan, supra, the assets which were necessary to engage in the same business which the transferor had engaged in prior to the transfer were received by the transferee without any consideration.

  8. James Armour, Inc. v. Comm'r of Internal Revenue

    43 T.C. 295 (U.S.T.C. 1964)

    In Love v. Commissioner, (C.A. 3) 113 F.2d 236, it was stated: ‘The so-called liquidating dividend was but a step, albeit an essential one, in the reorganization.’ Survaunt v. Commissioner, (C.A. 8) 162 F.2d 753, affirming 5 T.C. 665; Liddon v. Commissioner, (C.A. 6) 230 F.2d 304, affirming 22 T.C. 1220, certiorari denied 352 U.S. 824; Southwell Combing Co., 30 T.C. 487; Commissioner v. Morgan, (C.A. 3) 288 F.2d 676, reversing 33 T.C. 30, certiorari denied 368 U.S. 836, rehearing denied 369 U.S. 826; Ethel K. Lesser, 26 T.C. 306; David T. Grubbs, 39 T.C. 42; Joseph C. Gallagher, 39 T.C. 144p Pridemark, Inc., 42 T.C. 510, on appeal (C.A. 4); and John G. Moffatt, 42 T.C. 558, on appeal (C.A. 9). It should be added that this principle is reflected in section 1.331-1(c) of the Income Tax Regulations, which provides: In Lewis v. Commissioner, (C.A. 1) 176 F.2d 646, it was stated: ‘The liquidation of the old company does not change matters because a statutory reorganization may encompass as one of its incidents the liquidation of one of the corporations a party to the reorganization.’

  9. Moffatt v. Commissioner of Internal Revenue

    42 T.C. 558 (U.S.T.C. 1964)

    David T. Grubbs, 39 T.C. 42, 51-52. Cf. also Commissioner v. Morgan, 288 F.2d 676, 679-680 (C.A. 3), reversing 33 T.C. 30, certiorari denied 368 U.S. 836, rehearing denied 369 U.S. 826. We hold that there was an exchange of stock for stock within the meaning of the pertinent statutory provisions.

  10. Moffatt v. Comm'r of Internal Revenue

    42 T.C. 558 (U.S.T.C. 1964)

    David T. Grubbs, 39 T.C. 42, 51-52. Cf. also Commissioner v. Morgan, 288 F.2d 6 76, 679-680 (C.A. 3), reversing 33 T.C. 30, certiorari denied 368 U.S. 836, rehearing denied 369 U.S. 826. We hold that there was an exchange of stock for stock within the meaning of the pertinent statutory provisions.