Supreme Court of the United States, 1935

Bus & Transport Securities Corp. v. Helvering, Commissioner of Internal Revenue

Supreme Court of the United States · Decided December 16, 1935 · McReynolds

296 U.S. 391; 56 S. Ct. 277; 80 L. Ed. 292; 1935 U.S. LEXIS 587; 1 C.B. 192; 16 A.F.T.R. (P-H) 1266 (United States Reports)

Counsel

Mr. Albert E. James for petitioner., Mr. J. Louis Monarch, with whom Solicitor General Reed, Assistant Attorney General Wideman, and Mr. Sewall Key were on the brief, for respondent.

Cases that cite this one

35 later published cases cite this decision. The 25 that cite it most often are listed here.

Tallal v. Commissioner (United States Tax Court 1984)
Schneider National Leasing Inc v. United States (District Court, E.D. Wisconsin 2020)
Russell Redhouse, Jr. v. Commissioner of Internal Revenue (9th Cir. 1984)
Gauntt v. Commissioner (United States Tax Court 1984)
Schneider National Leasing Inc v. United States (7th Cir. 2021)
Coffey v. Commissioner (United States Tax Court 1985)
National Bank of Commerce of Norfolk v. United States (District Court, E.D. Virginia 1958)
United Light & Power Co. v. Commissioner of Internal Revenue (7th Cir. 1939)
Rex Mfg. Co. v. Commissioner (7th Cir. 1939)
Tate v. Commissioner of Internal Revenue (8th Cir. 1938)
Commissioner of Internal Revenue v. Bashford (3d Cir. 1937)
Union Trust Co. v. Heiner (District Court, W.D. Pennsylvania 1937)
Miller v. Commissioner of Internal Revenue (6th Cir. 1936)
Commissioner of Internal Revenue v. Groman (7th Cir. 1936)
In re Galveston-Houston Electric Co. (District Court, D. Massachusetts 1936)
Fitzgerald Truck Parts & Sales LLC v. United States (6th Cir. 2025)
Jimmie J. And Bonnie M. Ward v. Commissioner of Internal Revenue Service (9th Cir. 1986)
Surloff v. Commissioner (United States Tax Court 1983)
Schneider National Leasing Inc v. United States (District Court, E.D. Wisconsin 2019)
Garfinkle v. Commissioner (United States Tax Court 1998)
Zegeer v. Commissioner (United States Tax Court 1987)
Estate of Bennett v. Commissioner (United States Tax Court 1986)
Long v. United States (Court of Claims 1986)
Wendland v. Commissioner Of Internal Revenue (11th Cir. 1984)
Burford v. Commissioner (United States Tax Court 1984)

This list shows which later cases cite this one. It does not say how they treated it, and no review of that has been done. Not a substitute for Shepard’s or KeyCite — verify before relying.

Opinion

Mr. Justice McReynolds

delivered the opinion of the Court.

Petitioner — Bus and Transport Securities Corporation — challenges a deficiency income tax assessment for 1929, and says that the transaction from which the alleged taxable gain arose was reorganization within § 112, Rev. Act, 1928. Paragraphs (b) (4), (i) (1) and (i) (2) are specially relied upon. †

Jacobus owned practically all shares of two corporations, herein designated “A” and “ B,” which operated bus lines. The Public Service Corporation of New Jersey— the projector — desired to control these lines; and to that end engineered the following plan.

Public Service Coordinated Transport Company, affiliated with the projector, caused the organization of C. Easman Jacobus, Inc., took all the stock and paid therefor by transfering 2500 of the projector’s shares.

Jacobus caused petitioner to be organized and acquired all its stock in exchange for all shares of “A” and “ B ” corporations. Thereafter petitioner transferred to Public Service Coordinated Transport Company these “A” and “ B ” shares and took all shares of C. Easman Jacobus, Inc.

Thus, petitioner, through Jacobus, Inc., came to control 2500 of the projector’s shares. And Public Service *393 Coordinated Transport Company became owner of all shares of “A” and “ B ” corporations. Through these manipulations, the projector obtained indirect control of corporations “A” and “ B ” and the lines which they operate.

The Commissioner, the Board of Tax Appeals, and the Circuit Court of Appeals all rightly concluded that petitioner was not party to a reorganization within the statute. Certain corporate shares owned by it were exchanged for shares which another corporation owned. Neither party to the exchange acquired any definite immediate interest in the other. Nothing here, we think, even remotely resembles either merger or reorganization as commonly understood. Pinellas Ice Co. v. Commissioner, 287 U. S. 462.

The challenged judgment must be

Affirmed.

†

Margin of opinion in Helvering v. Minnesota Tea Co., ante, p. 378.

Case-law data current through December 31, 2025. Source: CourtListener bulk data.