- 33 -
that asset are transferees of the vendor, and liable
for its taxes * * *. But where, as in this case, the
vendee issues its stock directly to the stockholders,
then that stock never becomes a part of the vendor's
assets, for these assets become the property of the
vendee corporation when the vendor corporation ceases
to exist.
It is true that this holding may allow the par-
ties, under some circumstances, to vary the tax conse-
quences according to the manner in which a reorganiza-
tion is conducted, but this does not affect the amount
of the tax or the availability of property to satisfy
it. [Vendig v. Commissioner, supra at 96-97.]
Respondent contends, and we agree, that Vendig v. Commis-
sioner, supra, is distinguishable from the instant case. In
Vendig, the form of the transaction was structured so that Ms.
Vendig transferred to Mavco her Sales preferred stock in return
for Mavco preferred stock of equal value. Vendig v. Commission-
er, supra at 94-95. In contrast, in the instant case, the form
of the MSSTA transaction was structured so that, pursuant to the
respective subscription agreements, Mr. Scott and Ms. Scott each
acquired, inter alia, 10.5 percent, or in the aggregate 21 per-
cent, of the stock of AST for the nominal cash amount of ten
cents a share,12 which petitioners concede was an inadequate
12 Although after the closing of the MSSTA transaction the
Scotts owned in the aggregate 33 percent of AST's stock, re-
spondent concedes that, of that aggregate 33-percent stock inter-
est, the Scotts received an aggregate 12-percent stock interest
in AST in exchange for not only the nominal cash amount of ten
cents a share, but also Mr. Scott's guarantee of a loan and his
agreement to forgo for several years contributions by AST for his
benefit to AST's profit-sharing plan. We shall hereinafter ad-
dress only the aggregate 21-percent stock interest in AST that
(continued...)
Page: Previous 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 NextLast modified: May 25, 2011