MARIS, District Judge.
This is a suit under the Tucker Act, 28 U.S.C.A. § 41 (20), to recover income tax alleged to have been erroneously paid by the plaintiff for the year 1932. From the evidence I make the following special findings of fact:
The plaintiff, who is a resident of Devon, Chester county, Pa., in the year 1932 owned 1,000 shares of stock of Westmoreland, Inc., and received dividends thereon during the year 1932 in the sum of $1,400.
Westmoreland, Inc. (hereinafter called the new company), was organized on June 3, 1929, in connection with a nontaxable reorganization of the Westmoreland Coal Company (hereinafter called the old company). In the reorganization, which took place as of July 1, 1929, the old company transferred to the new company approximately 60 per cent. of its net assets, and the new company issued its entire capital stock, consisting to 200,000 shares without par value, to the stockholders of the old company pro rata. At the same time the old company converted its outstanding capital stock, consisting of 200,000 shares of the par value of $50 each, into an equal number of shares without par value, but having a stated value of $25 each. As a result of the reorganization the shareholders of the old company received in exchange for each share of the par value of $50 which they held, one share of stock of the new company without par value and one share of stock of the old company without par value.
On July 1, 1929, prior to the transfer to the new company, the old company had earnings or profits accumulated subsequent to February 28, 1913, but undistributed though available for distribution, inexcess of $2,058,000, leaving out of account a stock dividend of $2,500,000 which had been distributed in 1923. These accumulated earnings were not shown on the books of the old company, however. The old company continued in business after the reorganization and on December 31, 1929, it had a book surplus of $1,528,320.75. During the years 1930, 1931, and 1932, the old company earned $36,479.26, and paid dividends totaling $195,115.
The assets tranferred to the new company amounted to $10,105,608.12, made up as follows:
Cash $ 589,459.32
Accounts receivable 370.00
Bonds of various States 365,642.00
Bonds of the United States 863,885.63
Bonds of domestic corporations 45,865.00
Prepaid insurance 21.16
Less reserve for depreciation 131.22 2,493.24
Treasury stock 27,844.45
Accrued interest receivable 8,950.42
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