Jeffries v. Commissioner of Internal Revenue, 11646.
| Decision Date | 31 March 1947 |
| Docket Number | No. 11646.,11646. |
| Citation | 158 F.2d 225 |
| Parties | JEFFRIES v. COMMISSIONER OF INTERNAL REVENUE. |
| Court | U.S. Court of Appeals — Fifth Circuit |
J. Mark Wilcox, of Miami, Fla., for petitioner.
Helen Goodner and Robert N. Anderson, Sp. Assts. to Atty. Gen., both of Washington, D. C., Sewall Key, Acting Asst. Atty. Gen., and J. P. Wenchel, Chief Counsel, Bur. Int. Rev., and Charles E. Lowery, Sp. Atty., Bur. Int. Rev., both of Washington, D. C., for respondent.
Before SIBLEY, HUTCHESON, and WALLER, Circuit Judges.
In 1940, petitioner was the owner of half the stock, and president, of Girard Realty Co. In that year, pursuant to an arrangement made between her and the owners of the other half of the stock, the corporation transferred to petitioner one-half of its lands and property, and petitioner surrendered to the corporation for cancellation her one-half of the stock. Considering the property received by her in exchange for the stock as received in a complete liquidation of the corporation and her gain therefrom long term capital gain, petitioner returned it that way. The commissioner determined that there was not a complete but a partial liquidation that, therefore, her gain was, under Internal Revenue Code, Sec. 115(c) and (i),1 and Treasury Regulations No. 103, Sec. 19.115-5(c),2 short term capital gain and all of it must be taken into account in computing her net income.
The Tax Court, four judges dissenting, sustained the commissioner's determination, and petitioner is here insisting that court and commissioner are wrong.
We do not think so. Whether a transaction or result is taxable and what the tax is is not a matter to be determined in law upon considerations of general justice or equity. It is a matter of statutes and valid regulations, and what they mean. Neither is it to be determined in fact upon considerations of what was intended to be done. Rather it is to be determined by what was done. Because the statutes and regulations read as they do and the facts are what they are, it will not avail petitioner to point (1) to the fact that she all along intended to bring about a complete liquidation, and that she regarded the course taken as bringing this about; and (2) to the tax hardships she is being subjected to for a mere mistake in method if the method adopted is found to be a mistaken one. Neither will it avail her to point to the fact that Congress in 1942, recognizing the inequities of Section 115 (c) repealed the provision taxing a partial liquidation as a short term gain, without making the repeal retroactive. Taxation deals not with what was attempted to be done but with what was done. The evidence is explicit and without dispute that as originally planned there was to be a complete liquidation and that, the owners of the other half objecting to this, and insisting on retaining the corporation and their stock in it, the plan actually carried out was substituted for the one petitioner had proposed.
The record thus establishing without dispute that, in the language of the regulation, there was a complete cancellation "of a part of the corporate stock * * * by the complete retirement of any part of the stock, whether or not pro rata among the shareholders", the commissioner was right in determining,...
To continue reading
Request your trial
-
David Metzger Trust v. Comm'r of Internal Revenue , Docket Nos. 8824-77
...considerations of general justice or equity. It is a matter of statutes and valid regulations, and what they mean.” Jeffries v. Commissioner 158 F.2d 225, 226 (5th Cir. 1946), cert. denied 330 U.S. 843 (1947). The Fifth Circuit's third ground is stated as follows: It cannot be argued that t......
-
United States v. Gilmore, 15130.
...taxes go not on what ought to or might have been done but on what actually was done, whether the result, as in Jeffries v. Commissioner of Internal Revenue, 5 Cir., 158 F.2d 225,5 was an apparently unjust and heavy burden on the taxpayer, or, as is claimed here, imposes a loss upon the Anot......
-
Trust Co. of Georgia v. Allen
...value of its property it ought to have the benefit of the lower value under the election conferred by Sec. 302(j). In Jeffries v. Commissioner, 5 Cir., 158 F.2d 225, 226, we have, however, pointed out that: "Whether a transaction or result is taxable and what the tax is is not a matter to b......
-
Willis v. Commissioner
...as the assignee of Caveness, also never acquired an option to purchase the Land. In Jeffries v. Commissioner 46-2 USTC ¶ 9396, 158 F. 2d 225 (5th Cir. 1946), affg. Dec. 14,902 5 T.C. 1338 (1945), the Court of Appeals stated (at * * * Whether a transaction or result is taxable and what the t......