Commissioner v. Wheeler - 324 U.S. 542 (1945)


U.S. Supreme Court

Commissioner v. Wheeler, 324 U.S. 542 (1945)

Commissioner v. Wheeler

Nos. 510 and 511

Argued February 26, 1945

Decided March 26, 1945

324 U.S. 542

Syllabus

Article 115-3 of Treasury Regulations 101, promulgated under the Revenue Act of 1938, requires that, for computing under § 112(b)(7)(E) the amount of "earnings and profits" distributed by a corporation as liquidating dividends with respect to securities which the corporation had acquired by tax-free exchanges for its own stock and had later sold, the basis be the transferor's cost, rather than the value of the securities at the time of their acquisition by the corporation.

Held:

1. The regulation was reasonable, and a valid exercise of the rulemaking power. P. 324 U. S. 546.

2. Though the Tax Court relied on § 501 of the Second Revenue Act of 1940, it is unnecessary here to determine the constitutionality of applying that section retroactively. P. 324 U. S. 547.

143 F.2d 162 reversed.

Certiorari, 323 U.S. 694, to review the reversal of a decision of the Tax Court, 1 T.C. 640, which sustained the Commissioner's determination of deficiencies in income tax.

Page 324 U. S. 543



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