Respondent has determined a deficiency of $311,637.89 in the income tax of Moses L. Parshelsky, deceased, for the year 1954. The deficiency results from respondent's addition of $360,000 to 1954 income as a taxable dividend, representing the value of the stock of a newly formed subsidiary corporation distributed to him by a wholly owned parent corporation. The issue is whether the nonrecognition provisions of section 112(b)(11), I.R.C. 1939, apply to this distribution.
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