P and B owned all the outstanding shares of X Corporation. In 1937 P purchased B's shares and gave as consideration his notes bearing maturity dates varying from one to ten years. Two years later P transferred these shares to X Corporation, to be held as treasury stock, in return for the corporation's promise to discharge P's obligations to B as they matured. Pursuant to this agreement X paid $5,000 to B in discharge of one of P's notes. The commissioner treated this payment as a taxable dividend to P under section 115 (g) of the Internal Revenue Code 1 and assessed a deficiency. P paid the tax and brought an action in the district court to recover the payment, but his claim was denied. On appeal, held, affirmed. Wall v. United States, (C.C.A. 4th, 1947) 164 F. (2d) 462.

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