Gregory v. Helvering, 55 S. Ct. 266 | January
7, 1935 | Justice Sutherland | Docket No. 127
Short Summary:
In 1928, Petitioner Evelyn Gregory was owner of all of the stock
of United Mortgage Corporation (UMC). UMC held, among other assets,
1,000 shares of Monitor Securities Corporation (Monitor). Ms.
Gregory sought to sell the Monitor shares and limit the tax
liability that would result if UMC sold the Monitor shares and
subsequently transferred the amount realized from the sale to Ms.
Gregory in the form of a dividend.
To accomplish this goal, Ms. Gregory attempted to utilize the
Internal Revenue Code's (IRC) reorganization provisions. On
September 18, 1928, UMC formed Averill Corporation (Averill). Three
days later, UMC transferred the 1,000 shares of Monitor to Averill
for which all Averill shares were issued to Ms. Gregory. On
September 24, 1928, Averill was dissolved and liquidated –
it's only asset, the Monitor stock, was distributed to Ms.
Gregory. No
