“ It pointed out that, within the meaning of the Sixteenth Amendment, income from capital is gain severed therefrom and received by the taxpayer for his separate use; that the interest of the stockholder is a capital one, and stock certificates but evidence of it; that for purposes of taxation where a stock dividend is declared, the essential and controlling fact is that the recipient receives nothing out of the company's assets for his separate use and benefit. ”

“ The practical result of the things done was a transfer of the old assets and business, without increase or diminution or material change of general purpose, to the new corporation, a disposal for cash by each stockholder of half his interest therein, and an exchange of the remainder for new stock representing the same proportionate interest in the enterprise. Without doubt every stockholder became liable for the tax upon any profits which he actually realized by receiving the cash payment. ”

“ The value of his holdings would not have changed, and he would have retained the same essential rights in respect of the assets.
We cannot conclude that mere change for purposes of reorganization in the technical ownership of an enterprise, under circumstances like those here disclosed, followed by issuance of new certificates constitutes gain separated from the original capital interest. Something more is necessary-something which gives the stockholder a thing really different from what he theretofore had. ”