Moser v. Commissioner

CHARLES E. MOSER, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

JULIUS C. MOSER, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

ANNA M. TIGHE, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

CARL F. MOSER, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

JOSEPHINE T. MOSER, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

GEORGE J. MOSER, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Moser v. Commissioner

Docket Nos. 13470-13475.

United States Board of Tax Appeals

12 B.T.A. 672; 1928 BTA LEXIS 3495;

June 15, 1928, Promulgated

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F. W. Matthiessen, Jr.,2 B.T.A. 921">2 B.T.A. 921, followed.

John G. Remey, Esq., and R. S. McGlasson, C.P.A., for the petitioners.

W. Frank Gibbs, Esq., for the respondent.

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MURDOCK

The above cases were consolidated for hearing and decision. All of the facts were stipulated.

The Commissioner notified the petitioners of deficiencies as follows:

	1920	1921
Charles E. Moser	$7,297.12	$51.91
Julius C. Moser	1,661.74	14.37
Anna M. Tighe	1,130.11	12.41
Carl F. Moser	$1,646.03	$12.64
Josephine T. Moser	5,856.83	17.52
George J. Moser	8,716.64	65.46

The deficiencies for the year 1921, are no longer contested, but are conceded by all parties.

The only alleged error now urged is that in the case of all of the petitioners, except Charles E. Moser, the Commissioner has computed the profit on a liquidation of stock acquired by the petitioners from the estate of George Moser, Sr., who died intestate on July 18, 1914, on the basis of its value at that date rather than on November 16, 1925, when it was distributed to the petitioners by the administrator of the estate.

FINDINGS OF FACT.

Each of the petitioners is an individual residing in New Albany, Ind.

On July 18, 1914, George Moser, Sr., of New Albany, Ind., died intestate, and on July 24, 1914, the New Albany Trust Co. was appointed administrator of his estate in Floyd County Court, Floyd County, Indiana. George Moser, Sr., was the brother of the petitioner Charles E. Moser, the husband of the petitioner Josephine T. Moser, and the father of each of the other petitioners. At the time of his death, George Moser, Sr., was the largest stockholder in the George Moser Leather Co., a corporation doing business in New Albany, Ind., his stockholdings amounting to 171 7/8 shares.

On the date of George Moser's death, Charles E. Moser owned 46 7/8 shares and George J. Moser owned 31 1/4 shares of stock in this corporation. These two petitioners were also the owners of these shares on March 1, 1913.

After the death of George Moser, Sr., 15 months were required to properly administer his estate and it was not until November 3, 1915, that his estate was finally administered and distribution was made. In the distribution of his estate the petitioners received the following number of shares of stock of the George Moser Leather Co.:

Charles E. Moser	None.
Julius C. Moser	28
Anna M. Tighe	28
Carl F. Moser	28
George J. Moser	27 7/8
Josephine T. Moser	60
Total	171 7/8

After the death of George Moser, Sr., the petitioners carried on the business of the George Moser Leather Co., until June 30, 1920, when the corporation was dissolved and the business continued, under the same name, as a partnership. At the time of the dissolution of the corporation, each of the petitioners received a liquidating dividend to the extent of their holdings in the corporation. The fair market value of one share of stock of the George Moser Leather Co. was, on certain dates, as follows:

March 1, 1913	$574.90
July 18, 1914 - date of death of George Moser, Sr	725.81
Nov. 3, 1915 - date of final distribution of the estate of George Moser, Sr	850.49
June 30, 1920 - date of dissolution and liquidating dividend of corporation	876.17

OPINION.

MURDOCK: We are concerned in these cases with one question only - the profit which the petitioners received upon liquidation of the corporation known as the George Moser Leather Co. from the shares of stock received from the estate of George Moser, Sr.

Inasmuch as Charles E. Moser received no stock from this estate, we affirm the action of the Commissioner in determining the deficiencies for the years 1920 and 1921, in regard to this taxpayer.

We are not concerned with the profit realized by George J. Moser in connection with the 31 1/4 shares of stock which he owned on March 1, 1913.

The Commissioner was in error in determining that the 171 7/8 shares of stock owned by George Moser, Sr., at the time of his death were acquired at that time by the five petitioners who ultimately acquired these shares of stock. They acquired these shares of stock on November 3, 1915, and their profit is measured by the difference between the fair market value of the shares of stock on June 30, 1920, when the corporation was dissolved and the liquidating dividend was paid, and the fair market value of the shares on November 3, 1915, the date of the final distribution of the estate of George Moser, Sr. . See also F. W. Matthiessen, Jr. v.United States (Court of Claims, 6 Am.Fed. Tax Rep. 7105).

In accordance with the agreement of the parties, the deficiency in the tax of each of these petitioners with respect to the year 1921, as determined by the Commissioner, is affirmed.

Judgment will be entered under Rule 50.