Owen J. Roberts

“ A corporation realizes no gain or loss from the purchase or sale of its own stock.'
Petitioner contends that, as Congress must be taken to have exercised its constitutional power to the fullest extent in laying the tax, Section 22 (a) should be held to include the gain realized from sales of a corporation's own stock, and the quoted regulation cannot restrict the scope of the statutory definition. The respondent replies that such gain is capital gain and not income, as is demonstrated by the theory and practice of accounting [6] and by court decisions. ”

“ The sole question for decision is whether gain accruing to a corporation consequent on the purchase and resale of its own shares constitutes gross income within the meaning of Section 22 (a) of the Revenue Act of 1928. ”

“ The petitioner concedes that if nothing further appeared he would be bound to apply the statute in conformity to the regulation. He asserts, however, that the amendment adopted by the Treasury May 2, 1934, while this cause was pending before the Board, is controlling. By the amendment Article 66 is made to read: 'Whether the acquisition or disposition by a corporation of shares of its own capital stock gives rise to taxable gain or deductible loss depends upon the real nature of the transaction, which is to be ascertained from all its facts and circumstances. ”