511 F2d 1009 Frizzelle Farms Inc v. Commissioner of Internal Revenue
511 F.2d 1009
75-1 USTC P 9312
FRIZZELLE FARMS, INC., Appellant,
COMMISSIONER OF INTERNAL REVENUE, Appellee.
United States Court of Appeals,
Argued March 6, 1975.
Decided March 17, 1975.
Frank P. Meadows, Jr., Rocky Mount, N.C. (Biggs, Meadows, Batts & Winberry, Rocky Mount, N.C., on brief), for appellant.
James E. Johnson, Jr., Hull, Towill, Norman, Barret & Johnson, Augusta, Ga., and R. Grant Singleton, Singleton & Singleton, Myrtle Beach, S.C., on brief, for amicus curiae, Warner M. Lewis and Estate of Mary C. Lewis, Deceased, Warner M. Lewis, Executor.
George G. Wolf, Atty., Tax Div., U.S. Dept. of Justice (Gilbert E. Andrews, Michael L. Paup, Attys., Tax Div., U.S. Dept. of Justice, and Scott P. Crampton, Asst. Atty. Gen., on brief), for appellee.
Before WINTER, CRAVEN and RUSSELL, Circuit Judges.
After hearing oral argument and considering the briefs, and after studying the record, we agree with the Tax Court, Frizzelle Farms, Inc., 61 T.C. 737 (1974), that the fair market value of warrants received by the taxpayer as a result of the merger of P. Lorillard Corporation into Loew's Theatres, Inc., may be determined by the over-the-counter purchase and sales transactions of such warrants. As a consequence, we agree that the gain realized by the taxpayer from the exchange could not be reported on the installment basis under Section 453 of the Internal Revenue Code of 1954. We affirm on the opinion of the Tax Court.