- 127 -
result because reached by following a devious path. * * * The
controlling principle will be found in Gregory v. Helvering”.
Respondent also relies on another “reorganization” case,
West Coast Mktg. Corp. v. Commissioner, 46 T.C. 32 (1966), in
which the sole stockholder and president of the taxpayer
corporation desired to dispose of certain land. In order to
qualify the disposition as a tax-free reorganization under
sections 354(a)(1) and 368(a)(1)(B), a corporation, Manatee, was
formed, and the subject land was transferred to Manatee in
exchange for stock. The stock of Manatee was then transferred to
the acquiring corporation in exchange for its stock. Thereafter,
Manatee was liquidated. Citing Minn. Tea Co. v. Helvering,
supra, and Gregory v. Helvering, supra, this Court acknowledged
that the transaction fell literally within the reorganization
provisions but held that “the tax consequences must turn upon the
substance of the transaction rather than the form in which it was
cast.” West Coast Mktg. Corp. v. Commissioner, supra at 40.
Respondent argues that MB Parent in the instant case is
comparable to the intermediary corporation in West Coast Mktg.
Corp. in that it had no business, no offices, and no employees,
and it served no purpose other than to create the form necessary
to support a claim for tax-free reorganization treatment.
In addition to cases cited above, respondent relies on the
legislative history of the reorganization provisions, various
Page: Previous 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 NextLast modified: May 25, 2011