Wheeler

The facts and questions of law involved are similar in five cases which have been consolidated.

The facts as stipulated by the parties were adopted by the Tax Court as its findings of fact.

John H. Wheeler Company was organized as a corporation under the laws of the State of California in the year 1925 by John H. Wheeler and Frances V. Wheeler, his wife. In the years following the organization of said company, and until the year 1929, said John H. Wheeler and Frances V. Wheeler transferred to said company securities having a cost to them of $304,683.49 in exchange for 4,918 shares of the common capital stock of said company. On the dates of exchange the securities transferred to John H. Wheeler Company for said 4,918 shares of its common capital stock had an aggregate fair market value of $491,800.

In computing the gain or loss realized for federal income tax purposes on the sale of the particular securities which it had acquired following its organization, John H. Wheeler Company used the cost basis of said securities to its transferors, John H. Wheeler and Frances V. Wheeler. In its books of account, said John H. Wheeler Company computed gain or loss on the sale of said…