United States v. Frank N. Mattison and Ida G. Mattison

In this tax refund case the Government appeals from a judgment for the taxpayer in the amount of $53,461.89. The questions presented here have to do with the computation of gain realized when the taxpayer purchased all the stock of a corporation and sold the tangible assets thus acquired.

The facts are sot out at length in the district court’s opinion which is reported in 163 F.Supp. 754 . For the purposes of this opinion, the following résumé is sufficient :

Westcott Oil Company was an Idaho corporation which engaged in the business of selling gasoline and related petroleum products. Until 1945 the controlling interest in this company was held by Continental Oil Company. In that year Continental sold all of its Westcott Oil Company stock to C. J. Westcott, who was president of the latter company. Westcott in turn sold a considerable amount of the stock to friends and associates. It was at this time that the taxpayer, Frank N. Mattison, acquired his first interest in the company, consisting of twenty-five shares.

In 1950 C. J. Westcott and the other stockholders of Westcott Oil Company decided to dispose of their stock if a satisfactory price could be obtained. With this…