Gregory caused a new corporation to be formed, transferred appreciated stock to it, then liquidated it to obtain the stock at capital gains rates.

E302256

United States Supreme Court case landmark case tax law case

Helvering v. Gregory is a landmark 1935 U.S. Supreme Court tax law case that established the principle that transactions lacking economic substance beyond tax avoidance can be disregarded for tax purposes.

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All labels observed (1)

Label	Occurrences
Gregory caused a new corporation to be formed, transferred appreciated stock to it, then liquidated it to obtain the stock at capital gains rates. canonical	1

Statements (41)

Predicate	Object
instanceOf	United States Supreme Court case ⓘ landmark case ⓘ tax law case ⓘ
appliesTo	federal income tax transactions lacking economic substance ⓘ
areaOfLaw	federal income tax law ⓘ
citation	293 U.S. 465 ⓘ
citedFor	the proposition that sham transactions may be ignored for tax purposes ⓘ the requirement of a bona fide business purpose in tax-free reorganizations ⓘ
country	United States of America ⓘ surface form: United States
court	Supreme Court of the United States ⓘ
decisionDate	1935 ⓘ
establishedPrinciple	business purpose doctrine in tax law ⓘ economic substance doctrine in tax law ⓘ substance over form doctrine in tax law ⓘ
holding	a transaction with no business purpose or economic substance beyond tax avoidance may be disregarded for tax purposes ⓘ
impact	became a foundational precedent for the economic substance doctrine ⓘ frequently cited in U.S. tax litigation ⓘ influenced later codification of economic substance in the Internal Revenue Code ⓘ
jurisdiction	United States of America ⓘ surface form: United States
keyFactPattern	taxpayer caused a new corporation to be formed ⓘ taxpayer received the appreciated stock upon liquidation ⓘ taxpayer transferred appreciated stock to the new corporation ⓘ the new corporation was then liquidated ⓘ
languageOfOpinion	English ⓘ
legalIssue	whether a corporate reorganization lacking business purpose qualifies for tax-free treatment ⓘ
opinionBy	Justice George Sutherland ⓘ
petitioner	Guy T. Helvering ⓘ surface form: Guy T. Helvering, Commissioner of Internal Revenue
reasoning	a transaction that is a mere device to avoid tax does not qualify as a statutory reorganization ⓘ the reorganization provisions were intended to apply only to transactions undertaken for reasons germane to the business ⓘ
relatedConcept	Internal Revenue Code ⓘ surface form: Internal Revenue Code reorganization provisions capital gains ⓘ corporate reorganization ⓘ dividends ⓘ tax avoidance ⓘ tax evasion ⓘ
respondent	Evelyn F. Gregory ⓘ
standsFor	tax consequences are determined by the substance of a transaction, not merely its form ⓘ taxpayers may arrange their affairs to minimize tax, but must respect the requirements of the tax statute ⓘ
taxObjective	to obtain capital gains treatment instead of ordinary income or dividend treatment ⓘ
timePeriod	Great Depression ⓘ surface form: Great Depression era
unanimousDecision	true ⓘ

Referenced by (1)

Full triples — surface form annotated when it differs from this entity's canonical label.

Helvering v. Gregory → factualBackground → Gregory caused a new corporation to be formed, transferred appreciated stock to it, then liquidated it to obtain the stock at capital gains rates. ⓘ