upr000278 240

within the meaning of § 113 (a) (8) (B) and required no reduction in the depreciation basis of the properties ac­quired. 10 The values which the taxpayer received were additions to “capital” as that term has commonly been understood in both business and accounting practice;11 conformably with this usage the pertinent Treasury Regu­lations have consistently recognized that contributions to capital may originate with persons having no pro­prietary interest in the business.12 That this interpre- BROWN SHOE CO. v. COMMISSIONER. 7 10 Sec O'Meara, Contributions to Capital by Non-Tax L. Rev. 568, 572 (1948). shareholders, 3 No suggestion is made by the Commissioner that because the wtiratnhsifne rtsh ew setraet utteh.e subject of contract they were not “contributions” 11 See, e. g., Current Problems in Accounting— Proceedings of the AAccccoouunnttiinngg AIsnssotcitiuattei on2 0o f( 1A9c4c1o)u nt(iRnegvi sPeridn cSitpaletse muenndte rblyyi nAgm eCroircpaon­nraatnec iaFli nPaonlciicayl 5S2t5a t(e1m94e0n)t;s )I; laGruvteyh,m Saonmne aInndd icDioau goafl Cia,p iCtoarlp oTrraantsef eFris­under the Federal Income Tax Laws, 37 Mich. L. Rev. 745, 747 n. (3 (1939); Marple, Capital Surplus and Corporate Net Worth 12, 136-137 (1936). Cf. Magill, Taxable Income 389 (2d ed. 1945); 1 Mertens, Law of Federal Income Taxation §5.14 (1942); T e x a s d* P a c . R . C o. v. U n ited S ta te s, 286 U. S. 285, 289 (1932); L y k e s B ro s. S(.C .S . AC. o5.,t hIn Cci..r .4 21 9B4.2 )T;. A. 1395, 1401 (1940), aff’d 126 F. 2d 725, 727 H elv erin g v. C laib o rn e-A n n ap o lis F e r r y C o., 93 F. 2d 875, 876 (C. A. 4th Cir. 1938). (a)1 2(T8r)e—as1.; RTerge.a s.8 6,R egAr.t .1 011,1 3A(rat), (181)3— 1(;a ) Tr(eSa)s-.l ; ReTgr.e as9.4 , RAergt.. 110133, i§n 19p.a1r1t3: (a“)I n( Sr)e—s1p;e catn do fT rperaosp.e Rretgy. aIclqlu, i§r e2d9 .b11y3 a( a)c o(rSp)o-rla thiaovne arfetaedr December 31, 1920, from a shareholder as paid-in surplus, or fro m an y p erso n a s a co n trib u tio n to c a p ita l, the basis of the property in the hhaandd si no ft hteh e hcaonrdpso raoft iotnh ei s ttrhaen sbfaesriosr wihf icthh et hter apnrsofpeerr tyh,a dw onuoltd hbaevene made. . . ." The provision of § 113 (a) (8) (B), Revenue Act of f1e9d3e2r,a li nr ewvheincuhe tlheegi stleatrimo n,“ cwoantsr irbeuetniaocnt etdo wciatphiotuatl ” chfiarnstg ea pipne athree dA citn of 1934 and, following the above interpretation in the regulations, in the Acts of 1936 and 1938 and in the Internal Revenue Code.