James Clark McReynolds

“ Also, that the base cost for estimating capital gain in 1929 was the fair market value in 1922 of the shares then held. And since the corporation had the right to repurchase at par, the market value of five-sevenths did not exceed $100 per share. Further, that the failure to disclose 1922 taxable gain apparently resulted from innocent mistake of law; there was no false representation of fact; nothing gave support to the claim of estoppel. The cause was remanded for ascertainment of the amount of the overpayment.
We find no reason to disagree with the judgment of the court. ”

“ He assigned 37 per cent. to the preferred and 62 per cent. to the common shares and made a dificiency assessment of $12,005.38. Thereupon, the taxpayer claimed: First, that in 1922 each Viscose Company share was fairly worth $1,164.70, and, with that as the base, no taxable gain arose upon redemption of the preferred stock. Also, that he had overpaid to the extent of $63,750. Second, that apportionment of the cost of both between preferred and common shares was impracticable and no taxable gain could arise prior to recovery of the full outlay. ”

“ The defense of estoppel was not before the Board. Under what we regard as the correct practice, General Utilities & Operating Co. v. Helvering, 296 U.S. 200, 56 S.Ct. 185, 80 L.Ed. 154, decided December 9, 1935, the court should have passed the point. ”