S. Klein on the Square, Inc. v. Comm'r of Internal Revenue

6 Citing cases

  1. Intermountain Lumber Co. v. Commissioner

    65 T.C. 1025 (U.S.T.C. 1976)

    By contrast, if there are no restrictions upon freedom of action at the time he acquired the shares, it is immaterial how soon thereafter the transferee elects to dispose of his stock or whether such disposition is in accord with a preconceived plan not amounting to a binding obligation. Stephens, Inc. v. United States, 464 F.2d 53, 66-67 (8th Cir. 1972), cert. denied 409 U.S. 1118 (1973); Barker v. United States, 200 F.2d 223, 229 (9th Cir. 1952); S. Klein on the Square, Inc., 14 T.C. 786, 789-790 (1950), affd. 188 F.2d 127, 129 (2d Cir. 1951), cert. denied 342 U.S. 824 (1951); American Bantam Car Co., 11 T.C. 397, 404-408 (1948), affd. per curiam 177 F.2d 513 (3d Cir. 1949), cert. denied 339 U.S. 920 (1950); Wilgard Realty Co., 43 B.T.A. 557, 561 (1941), affd. 127 F.2d 514, 516 (2d Cir. 1942), cert. denied 317 U.S. 655 (1942); Schumacher Wall Board Corp., 33 B.T.A. 1211, 1214 (1936), affd. 93 F.2d 79, 81 (9th Cir. 1937); Wilbur F. Burns, 30 B.T.A. 163, 171-172 (1934), affd. sub nom. Bassick v. Commissioner, 85 F.2d 8, 10 (2d Cir. 1936), cert. denied 299 U.S. 592 (1936); Federal Grain Corp., 18 B.T.A. 242, 248-249 (1929).

  2. Intermountain Lumber Co. v. Comm'r of Internal Revenue

    65 T.C. 1025 (U.S.T.C. 1976)

    By contrast, if there are no restrictions upon freedom of action at the time he acquired the shares, it is immaterial how soon thereafter the transferee elects to dispose of his stock or whether such disposition is in accord with a preconceived plan not amounting to a binding obligation. Stephens, Inc. v. United States, 464 F.2d 53, 66-67 (8th Cir. 1972), cert. denied 409 U.S. 1118 (1973); Barker v. United States, 200 F.2d 223, 229 (9th Cir. 1952); S. Klein on the Square, Inc.; 14 T.C. 786, 789-790 (1950), affd. 188 F.2d 127, 129 (2d Cir. 1951), cert. denied 342 U.S. 824 (1951); American Bantam Car Co., 11 T.C. 397, 404-408 (1948), affd. per curiam 177 F.2d 513 (3d Cir. 1949), cert. denied 339 U.S. 920 (1950); Wilgard Realty Co., 43 B.T.A. 557, 561 (1941), affd. 127 F.2d 514, 516 (2d Cir. 1942), cert. denied 317 U.S. 655 (1942); Schumacher Wall Board Corp., 33 B.T.A. 1211, 1214 (1936), affd. 93 F.2d 79, 81 (9th Cir. 1937); Wilbur F. Burns, 30 B.T.A. 163, 171-172 (1934), affd. sub nom. Bassick v. Commissioner, 85 F.2d 8, 10 (2d Cir. 1936), cert. denied 299 U.S. 592 (1936); Federal Grain Corp., 18 B.T.A. 242, 248-149 (1929).

  3. Overland Corp. v. Comm'r of Internal Revenue

    42 T.C. 26 (U.S.T.C. 1964)

    It is our view that the facts presented here fall within the rationale of Hazeltine Corporation v. Commissioner, supra; Bassick v. Commissioner, supra; and Maine Steel, Inc. v. United States, supra. Cf. S. Klein on the Square v. Commissioner, 188 F.2d 127, affirming 14 T.C. 786; Barker v. United States, 200 F.2d 223. We accordingly hold that the transferors of assets of the old company to petitioner in exchange for its stock were not in control thereof ‘immediately after the exchange’ and that the transaction in question fails to qualify as a nontaxable exchange within the meaning of section 112(b)(5) of the Revenue Act of 1936.

  4. Frederic R. Harris, Inc.  v. Comm'r of Internal Revenue

    40 T.C. 744 (U.S.T.C. 1963)   Cited 2 times

    In view of the foregoing, it becomes unnecessary to consider other possible grounds for supporting the Commissioner's determination. The Commissioner has argued that, in any event, the interposition of the estate between the decedent's sole proprietorship and the corporation is fatal to petitioner's position, citing S. Klein on the Square, Inc., 14 T.C. 786, 790-792, affirmed on another ground 188 F.2d 127 (C.A. 2), certiorari denied 342 U.S. 824, and E. T. Renfro Drug Co., 11 T.C. 994, affirmed 183 F.2d 846 (C.A. 5), certiorari denied 340 U.S. 930. We do not pause to examine the validity of possible distinctions between those cases and the case at bar pressed upon us by petitioner, nor do we find it appropriate to reconsider the Klein case in the light of alleged factual distinctions and in the light of a dissenting opinion in the Court of Appeals in the Renfro case, as urged by petitioner.

  5. Farr v. Comm'r of Internal Revenue

    24 T.C. 350 (U.S.T.C. 1955)   Cited 8 times

    It was held that because a pre-existing obligation to convey the 65,000 shares existed the taxpayers were not in control of the corporation immediately after the transfer, although they might literally have received 100 per cent of the shares. See, also, S. Klein on the Square v. Commissioner, 188 F.2d 127, affirming 14 T.C. 786, certiorari denied 342 U.S. 824. It is not denied by petitioner that the immediate purpose of the transactions in question was to reduce the value of the stock of Motor Sales so as to place a substantial part of petitioner's Motor Sales stock closer to Michael's means in the event stock should be offered to him.

  6. Scientific Instrument Co. v. Comm'r of Internal Revenue

    17 T.C. 1253 (U.S.T.C. 1952)   Cited 8 times

    Prospective purchasers of the public shares were, of course, not parties to the plan and there was no party to the agreement obligated to take enough new shares to reduce the old corporation's holding below the 80 per cent necessary to constitute control. In this latter respect, it might have been argued by petitioner that the provisions of the plan calling for purchase by Securities Investment Company of 37,500 shares of the stock held by the old corporation's shareholders was an integral step in the plan which would effectively require divestiture by the old interests of the requisite statutory control of the new corporation and thus bring the case in line with such decisions as S. Klein on the Square, Inc., 14 T.C. 786. Petitioner does not press this point, however, presumably because the parties themselves did not carry out that part of the agreement. We attach no more importance to it than did the parties.