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Minnesota Tea Company V. Helvering: Case Study

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After that the second requirement as mentioned earlier in the general rule for section 351 is we must make sure that the exchange is only for stocks. These stocks include common or non-qualified preferred. A strong U.S. Federal court case was Minnesota Tea Company .v, Helvering. This case mentioned in the citation 4 was an argument weather cash received by a corporation in regards to a reorganization was subject to taxable gains on distribution. As a ruling the court stated "(1) If the corporation receiving such other property or money distributes it in pursuance of the plan of reorganization, no gain to the corporation shall be recognized from the exchange, but". By the transferor receiving stock this better guarantees that the person transferring

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