
    Covington National Bank, Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 12834.
    Promulgated July 27, 1928.
    
      D. E. M'ountcastle, for the petitioner.
    
      P. A. Bayer, Esq., for the respondent.
   OPINION.

Marquette:

The facts in this proceeding seem to fall squarely within the provisions of section 202 (c) (2) of the Revenue Act of 1921.

Sec. 202. (e) For the purposes of this title, on an exchange of property, real, personal or mixed, for any other such property, no gain or loss shall be recognized unless the property received in exchange has a readily realizable.market value; but even if the property received in exchange has a readily realizable market value, no gain or loss shall be recognized—
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(2) When in the reorganization of one or more corporations a person receives in place of any stock or securities owned by him, stock or securities in a corporation a party to or resulting from such reorganization. * * *

No doubt the petitioner sustained a loss — greater even than has been claimed in its tax return. But it is not such a loss as, under the 1921 Revenue Act, can be deducted from income. The determination of the respondent is, therefore, sustained.

Judgment will be entered for the respondent.  