Commissioner v. Munter, 331 U.S. 210 (1947)

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Commissioner of Internal Revenue v. Munter

No. 674

Argued April 10, 1947
Decided May 5, 1947 *
331 U.S. 210

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE THIRD CIRCUIT

Syllabus

1. Under Internal Revenue Code §§ 22(a), 115(a), (b), upon a reorganization of two corporations into a new corporation, accumulated earnings and profits of the predecessor corporations which are undistributed in the reorganization are deemed to be acquired by the successor corporation and, upon distribution by it, are taxable as income, notwithstanding the participation of new investors in the successor corporation. Pp. 215-216.

2. To what extent the accumulated earnings and profits of the predecessor corporations have been retained by the successor in this case is for the Tax Court to determine upon a factual analysis. Pp. 216-217.

157 F.2d 132 reversed.

The Tax Court sustained the Commissioner’s determination of deficiencies in respondents’ income taxes. 5 T.C. 108. The Circuit Court of Appeals reversed. 157 F.2d 132. This Court granted certiorari. 329 U.S. 709. Reversed and remanded, p. 217.