J. K. McAlpine Land & Development Co. v. Commissioner

Petitioner seeks reversal of a decision of the Board of Tax Appeals 1 which determined that there was a deficiency of $1,-073.59 in respect of petitioner’s income tax for 1933, and that petitioner was subject to a penalty of $268.39 (25% of $1,073.59) for failure to file its return within the time prescribed by law or by the Commissioner of Internal Revenue in pursuance of law.

In 1933 a Nevada corporation called Bakersfield Memorial Park Incorporated, issued to petitioner, in consideration of advancements by petitioner aggregating $9,-594.53 and services rendered by petitioner and others in promoting the corporation, 8,000 shares of stock, of which petitioner in 1933 transferred (1) to the other promoters, as compensation for their services, 1,210 shares and (2) to creditors of petitioner, in satisfaction of debts aggregating $21,198.38, 5,044 shares. As income from these transactions, petitioner reported $7,-575.88.

The Commissioner determined, and the Board agreed, that the 8,000 shares had, when issued to petitioner, a fair market value of $3.38 a share — a total of $27,040. Accordingly the Board held that the 6,790 shares remaining to petitioner after transferring 1,210…