1934 BTA LEXIS 1370 | B.T.A. | 1934
Lead Opinion
The petitioner contends, first, that, when the New Hampshire Avenue property was abandoned as a residence and was placed in the hands of real estate agents for sale, at that time it became a transaction entered into for profit, and he cites Larkin v. Gage, 28 Fed. (2d) 18, in support of his position. We disagree.
The petitioner next argues that since the New Hampshire Avenue property and money were exchanged for the Dove Farm, the transaction does not come within the exchange provisions of the statute,
* * * But the taxpayer calls attention to Sec. 203 (b) (2) of the Act f 1924 which provides that:
(2) No gain or loss shall he recognized if stock or securities in a corporation a party to a reorganization are, in pursuance of the plan óf reorganization, exchanged solely for stock or securities in such corporation or in another corporation a party to the reorganization.
It argues that the foregoing clause applies to the present case and nullifies he calculation of k gain based upon the difference between the value of the stock /hen issued and the amount realized when it was sold. The government, how-ver, seeks to avoid the application of the clause. It says that the stock of he old company was not exchanged “solely for stock or securities” of the ew company but that the old stock and cash, upon payment of which the tax-ayer was permitted to participate in the reorganization, were so exchanged, et the payment of cash did not take the transaction out of Sec. 203 (b) 2), for the word “ solely ” is aimed at what is received in exchange nd not at what is handed over in order to secure participation in a re-rganization. * * *
Judgment will be entered for the respondent.
[See. 112, Revenue Act of 1928.1 * * * (b) Exchanges solely in hind.—
(1) Property held for productive use or investment. — No gain or loss shall be recognized if property held for productive use in trade or business or for investment (not including stock in trade or other property held primarily for sale, nor stocks, Donds, notes, choses in action, certificates of trust or beneficial interest, or other securities or evidences of indebtedness or interest) is exchanged, solely for property of a like kind to be held either for productive use in trade or business or for investment.