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Weiss v. Stearn, 265 U.S. 242 (1924)
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General SummaryThis case is from a collection containing the full text of over 16,000 Supreme Court cases from 1793 to the present. The body of Supreme Court decisions are, effectively, the final interpretation of the Constitution. Only an amendment to the Constitution can permanently overturn an interpretation and this has happened only four times in American history.
Weiss v. Stearn, 265 U.S. 242 (1924)
Weiss v. Stearn Nos. 262 and 263 Argued April 30, 1924 Decided May 26, 1924 265 U.S. 242
CERTIORARI TO THE CIRCUIT COURT OF APPEALS
FOR THE SIXTH CIRCUIT
Syllabus
Pursuant to an agreement, the stockholders of an Ohio corporation deposited with a trustee their certificates for all its capital stock ($5,000,000), and other parties deposited $7,500,000; the depositors organized a new Ohio corporation with authorized capital stock of $25,000,000, and powers like those of the old corporation; the new corporation took over the property, assets and business of the old one, assuming its contracts and liabilities, and delivering certificates for all its stock to the trustee, in payment, and carried on the business under the old management; the old corporation was dissolved; the trustee delivered half of the new stock and the whole $7,500,000 to the old stockholders pro rata, and the other half of the new stock to the other depositaries, so that each owner of old stock received cash, and also shares of new stock representing an interest in the corporate property and business half as large as he had before.
Held:
(1) That the new stock received by the old stockholders, unlike the money, was not the proceeds of a sale, but represented part of the same capital investment as their old shares, without any segregated gain taxable as income under the Revenue Act of 1916. P. 252.
(2) The transaction amounted to a financial reorganization under which each stockholder retained half his interest and disposed of the remainder. P. 254.
(3) Questions of taxation must be determined by viewing what was actually done, rather than the declared purpose of the participants. Id.
(4) When applying the Sixteenth Amendment and income tax laws enacted under it, the courts must regard matters of substance, and not of mere form. Id.
285 F. 689 affirmed.
Certiorari to judgments of the circuit court of appeals affirming judgments recovered by the respondents in the district court in their actions to recover money paid under protest as income taxes.
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Chicago: U.S. Supreme Court, "Syllabus," Weiss v. Stearn, 265 U.S. 242 (1924) in 265 U.S. 242 265 U.S. 243–265 U.S. 251. Original Sources, accessed November 22, 2024, http://originalsources.com/Document.aspx?DocID=T5S9SGM7USSVMT7.
MLA: U.S. Supreme Court. "Syllabus." Weiss v. Stearn, 265 U.S. 242 (1924), in 265 U.S. 242, pp. 265 U.S. 243–265 U.S. 251. Original Sources. 22 Nov. 2024. http://originalsources.com/Document.aspx?DocID=T5S9SGM7USSVMT7.
Harvard: U.S. Supreme Court, 'Syllabus' in Weiss v. Stearn, 265 U.S. 242 (1924). cited in 1924, 265 U.S. 242, pp.265 U.S. 243–265 U.S. 251. Original Sources, retrieved 22 November 2024, from http://originalsources.com/Document.aspx?DocID=T5S9SGM7USSVMT7.
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