Kuckenberg

Kuckenberg Construction Company, an Oregon corporation, pursuant to a plan of complete liquidation sold and assigned three construction contracts, the income from which had been fully earned, to an independent purchaser for $327,000.00. The company was on the cash method of accounting. The question presented by this review is whether, under § 337(a) of the Internal Revenue Code of 1954, 26 U.S.C.A. § 337 (a), 1 nonrecognition attached to the proceeds of this sale. The tax court held for the taxpayers and the commissioner has petitioned this court for review. We here hold that the proceeds are taxable.

Respondents are the transferees of the assets of Kuckenberg Construction Company. A second question is presented by their contention that they may not, as transferees, be held liable for tax payable by the transferor corporation. We here hold that they are liable.

Upon dissolution of the corporation, the transferees continued the construction business in partnership form. Among the corporate assets was an uncompleted contract known as the “Booth Ranch Contract,” which was transferred to respondents for completion. In his' notices of transferee liability, the commissioner determined…