International Freighting Corporation, Inc. v. Commissioner
United States Court of Appeals for the Second Circuit
135 F.2d 310 (1943)
Relevant factsFree
International Freighting distributed bonus shares of its own stock to employees in exchange for their services, deducting the shares' value as a business expense on its tax return. The value of the services received as compensation ($24,858.75) exceeded the company's adjusted basis in the shares ($16,153.36), raising the question of how the transaction should be taxed.
IssueFree
Whether the disposition of stock in exchange for services rendered is a taxable event.