United States v. Hendler
United States Supreme Court
303 U.S. 564 (1938)
- Written by Heather Ryfa, JD
Facts
Hendler Creamery Company, Inc. (Hendler) (plaintiff) underwent a reorganization through merger with Borden Company. As part of the transaction, Borden assumed and paid Hendler’s bond debt of $534,297.40. Hendler did not pay tax on the gain from discharge of debt, claiming that it was not taxed as part of a plan of reorganization under § 112 of the Revenue Act of 1928. The commissioner of the Internal Revenue Service (defendant) assessed tax, contending that the debt discharge did not qualify under § 112. Hendler appealed the assessment in district court, which ruled in favor of Hendler. The commissioner appealed to the United States Court of Appeals for the Fourth Circuit, which also ruled in favor of Hendler. The commissioner then appealed to the United States Supreme Court.
Rule of Law
Issue
Holding and Reasoning (Black, J.)
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