Rose v. Trust Co.
| Decision Date | 26 October 1928 |
| Docket Number | No. 5381.,5381. |
| Citation | 28 F.2d 767 |
| Parties | ROSE, Collector of Internal Revenue, v. TRUST CO. OF GEORGIA. |
| Court | U.S. Court of Appeals — Fifth Circuit |
T. H. Lewis, Jr., Sp. Atty., Bureau of Internal Revenue, of Washington, D. C., C. P. Goree, Asst. U. S. Atty., of Atlanta, Ga. (C. M. Charest, Gen. Counsel, Bureau of Internal Revenue, of Washington, D. C., and Clint W. Hager, U. S. Atty., of Atlanta, Ga., on the brief), for appellant.
Walter T. Colquitt and Clifford L. Anderson, both of Atlanta, Ga. (Benj. J. Conyers, Granger Hansell, Colquitt & Conyers, and Anderson, Rountree & Crenshaw, all of Atlanta, Ga., on the brief), for appellee.
Before WALKER, BRYAN, and FOSTER, Circuit Judges.
This is a suit to recover $199,764.84, alleged to have been improperly collected from appellee by appellant as income taxes for the year 1919. The jury was waived, and a judgment was entered by the District Court in favor of appellee for $199,258.53, with interest at 6 per cent. per annum from March 10, 1924. There is no dispute as to the facts. Those material to a decision are as follows:
In August, 1919, a syndicate, of which appellee was a member, was formed for the purpose of reorganizing the Coca-Cola Company of Georgia. Another company of the same name was incorporated under the law of Delaware, with a capital stock of 100,000 shares of preferred stock, of the par value of $100, and 500,000 shares of common stock, with no par value. The syndicate agreed to purchase 83,000 shares of the common stock at $5 per share and to underwrite the remaining 417,000 shares of common stock for sale to the public at $35 per share. The common stock was oversubscribed and was sold to the public at $40 and the syndicate received and paid for the stock it had agreed to purchase. The assets of the Coca-Cola Company of Georgia were transferred to the Coca-Cola Company of Delaware in exchange for the 100,000 shares of preferred stock and $15,000,000 in cash. These assets consisted of physical property worth about $5,000,000, and the trade-mark and formula of Coca-Cola, together with the good will of the company. After it was put on the market, the common stock fell as low as $18 a share, but has since advanced greatly above the original price of $40.
Appellee received 13,677 shares of common stock at $5 per share as its portion, and on this transaction the Commissioner assessed income taxes based on an estimated profit of $35 per share. This stock was...
To continue reading
Request your trial
-
Watson v. Commissioner
...Further, we cannot say that there was a tax avoidance understanding about the amounts or rates of future, if any, dividends. See Rose v. Trust Co., 28 F. 2d 767 1 USTC ¶ 331, affirming 25 F. 2d 997 1 USTC ¶ 291. In addition, the amounts of the dividends on the common stock in the taxable ......
-
Dees v. Commissioner
...compensation. Petitioner relies upon Trust Co. of Georgia v. Rose 1 USTC ¶ 291, 25 F. 2d 997 (N. D. Ga., 1928), affd. 1 USTC ¶ 331 28 F. 2d 767 (C. A. 5, 1928) as supporting his position that income is not received upon a bargain purchase of stock. In that case a new corporation was set up ......
-
Berckmans v. Commissioner, Docket No. 73967.
...The facts here are to some extent similar to those in Trust Company of Georgia v. Rose 1 USTC ¶ 291, 25 F. 2d 997, affd. 1 USTC ¶ 331, 28 F. 2d 767, and Eaton v. White 1934 CCH ¶ 9254, 70 F. 2d 449. In both of those cases sales of stock to private purchasers were very shortly followed by sa......