Hugo Black

“ When the Senior Investment Corporation was organized Fisher and his wife paid for their shares of stock with securities which had cost them $14,500,000 but had by the date of organization acquired a market value of $88,000,000. To show that the corporation had a deficit and that consequently the distribution of General Motors stock was not from 'earnings or profits,' the taxpayers used the corporation's computation based on the $88,000,000 rather than the $14,500,000 figure. ”

“ Since Section 112 of the Revenue Act of 1934, 26 U.S.C.A. Int.Rev.Acts, page 692, did not tax the gain resulting from transfers of property to a corporation in exchange for stock in that corporation, it is obvious that rejection of the Commissioner's contention would result in permitting the Section 112 exemption to be used as a device for evading taxes Congress intended to impose on many gains actually realized from sales of property. ”