The opinion
Disney, J., dissenting: In this dissent I will confine myself to the matter of ascertainment of cost of those properties which were purchased from the receiver and those which were purchased from creditors who had acquired them at foreclosure sale. I am unable to agree that the cost of such properties was anything other than the amount paid therefor. Under the statute the basis of property is, in general, its cost. Though there was a reorganization and though in connection therewith the petitioner issued stock and assumed obligations, it seems to me clear that there were certain properties which it was unable to acquire by that procedure, that it was necessary to purchase them, and I can see no reason to ascribe to such properties any effect from the fact of issuance of stock and assumption of obligations. Plainly the procedure of issuing stock and assuming obligations was not sufficient to acquire the other properties. They had to be purchased. They were in reality outside the pale of the reorganization through the stock obligations assumption operation. Quantitatively such purchased properties were large. I note that the total value of the acquired assets is stipulated to be $4,346,075.97. The unencumbered property purchased from the receiver was $700,000, while U. S. Spruce was paid about $436,000 for the property covered by the canceled contract. I would not permit the mere fact of a general reorganization procedure, under which these properties could not be acquired except by purchase, in part at auction where others might have bid, to overthrow the usual rule that basis is cost. I, therefore, respectfully dissent.
Turnek and Harron, ¡7/., agree with this dissent.