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SALES AT EXCHANGES, BOARDS OF TRADE, ETC.

(See EXCHANGES, BOARDS OF TRADE, ETC., SALES AT.)

SHOWS AND EXHIBITIONS.

(See EXHIBITIONS AND SHOWS.)

SNUFF.

(See TOBACCO, CIGARS, AND SNUFF.)

STAMPS.

(See INTERNAL-REVENUE STAMPS.)

STOCKS.

(See also DECISIONS 21152, p. 12; 21279, p. 61; 21467, p. 228; 21563, p. 229; 21707,

p. 66.)
(20694.)

Stamp tax-Preferred stock issued in lieu of common stock. Preferred stock issued in lieu of common stock not taxable when there is no change

of ownership.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., February 7, 1899.

SIR: This office is in receipt of your letter of January 20, 1899, submitting a communication from Charles H. Poland, treasurer of the Wheelwright Filler and Manufacturing Company, 72 Weybosset street, Providence, R. I., and you ask to be advised on the questions therein contained.

Mr. Poland submits the following questions:

(1) When common stock in a corporation is surrendered to the corporation and preferred stock is issued in place of the common stock thus surrendered, no other equivalent being passed therefor, are stamps required on either or both?

Answer. Neither the certificates representing the common stock nor the certificates representing the preferred stock issued in lieu of the common stock would be liable to taxation, providing there is no change of ownership.

(2) If the common stock surrendered to the corporation exceeds the amount of the preferred stock issued to the same person, what stamps are required?

Answer. None.

(3) When certificates of stock are transferred to a corporation and certificates of smaller denominations are issued to the same parties in place of same, or to the same person with the word "trustee" added, are stamps required?

Answer. When certificates of stock are transferred to a corporation, for which certificates of smaller denominations are issued to the same parties, neither the certificates of stock surrendered nor the new certificates of smaller denominations issued in lieu thereof require to be stamped. If, however, the word "trustee" should be added in the new certificates which are issued, then the tax is imposed at the rate of 2 cents per $100 or fraction thereof of the face value of the certificates surrendered, and the stamps representing this fact should be affixed to the certificates surrendered.

(4) If common stock is surrendered and preferred stock for the part of the whole of it is issued to another person than the one named in the original certificate, but no equivalent is given for the same, are stamps required?

Answer. The certificates representing the common stock, for which preferred stock is to be issued in the name of a person, other than the one named in the certificates surrendered, must have stamps affixed thereto at the rate of 2 cents per $100 or fraction thereof of the face value.

(5) Are the stamps required on a transfer of stock to be paid for by the grantor or grantee?

Answer. The law does not state who shall pay for the stamps required on transfers of certificates of stock. It is a question which must be settled between the parties to the transaction.

Respectfully, yours,

Mr. THOMAS A. LAKE,

G. W. WILSON, Acting Commissioner.

Collector Internal Revenue, Hartford, Conn.

(20727.)

Stamp tax-Transfers of stock by brokers.

Where brokers acting in behalf of their principals buy stock and receive stamped bills of sale in their own names, they may transfer such stock on the books of the corporation to the names of their principals without additional stamp tax. TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., February 21, 1899.

SIR: This office is in receipt of your letters, under date of February 1 and 3, 1899, respectively, in reference to a letter written you by this

office in reply to an inquiry from the Iowa Central Railway Company regarding stock transactions. You submit letters from several bankers and brokers in your city in reference to this matter, and state that you trust this office will consider the question.

You are advised that this office has carefully considered the question of sales of stock between brokers and their principals, and now holds that where brokers are acting in good faith for their principals, only one tax is required on the sale or transfer of stock between the brokers and their principals, and, therefore, when A, owning stock standing in his own name, indorses it in blank and hands it to his. broker, B, to sell, broker B thereupon selling this stock to another broker, C, who is buying in behalf of his principal, D, and giving said broker C a properly stamped bill of sale, and said broker C thereupon requests the company to reissue said stock to the actual purchaser, D, no additional stamp is required on the transaction.

Respectfully, yours,

N. B. SCOTT, Commissioner.

Mr. CHAS. H. TREAT, Collector Second District, New York, N. Y.

(20793)

Stamp tax-Certificates of stock of foreign corporations.

Certificates of stock of a foreign corporation when sold or delivered within the United States are liable to the same tax as certificates of stock of any domestic corporation.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., March 6, 1899. SIR: This office is in receipt of a letter under date of February 25, 1899, from L. C. Holden, secretary of the Rock Lake Mining Company, Sault Ste. Marie, Mich.

Mr. Holden states that the Rock Lake Mining Company is organized under the Canadian laws, and that the mines and "home office are situated in Canada," and he wishes a ruling upon each of the following questions:

(1) Are certificates of stock in the above-named company subject to taxation when sold or delivered to persons residing within the United States?

You will please advise Mr. Holden that certificates of stock of a foreign corporation when sold or delivered within the United States are liable to the same tax as certificates of stock of any domestic company, association, or corporation.

(2) If certificates of stock are held by persons in the United States, and are assigned in blank on the back thereof, are the certificates subject to taxation because of such assignment, the articles of incorporation providing that the certificates are transferrable only upon the books of the company upon surrender of the certificates?

You will please advise Mr. Holden that the answer to question No. 1 applies to this question as well.

(3) Does a proxy to vote abroad, but executed in this country, require to be stamped?

You will please advise Mr. Holden that a proxy to vote abroad, but executed in this country, does not require to be stamped.

(4) Does a certificate of stock, when the home office of the company is in Canada, require to be stamped if, as a matter of fact, one or more of the necessary officers sign it within the United States?

You will please advise Mr. Holden that the mere signing of a certificate of stock of a foreign corporation by the officers thereof within the United States does not subject same to the stamp tax, but if, as stated in answer to question No. 1, said certificate is sold or transferred within the United States, it would then become subject to taxation.

(5) Does a deed or mortgage of Canadian real estate executed within the United States on Canadian forms of conveyance to Canadian purchasers require stamps?

You will please advise Mr. Holden that a deed or mortgage on Canadian real estate executed in the United States and to be delivered in Canada to Canadian purchasers is not subject to taxation under the act of June 13, 1898.

Respectfully, yours,

G. W. WILSON, Commissioner. Mr. CHARLES WRIGHT, Collector Internal Revenue, Detroit, Mich.

(21277.) Transfer of stock.

When a certificate of stock is presented for transfer and the power of attorney on the back thereof is dated prior to July 1, 1898, although the name of the transferee is not filled in until after that date, both the power of attorney and the certificate are required to be stamped.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., June 14, 1899.

SIR: This office is in receipt of a letter under date of June 6, 1899, from A. J. Miller, secretary of the Equitable Securities Company, 58 Pine street, New York, N. Y., who submits the following question for a ruling:

Where a certificate of stock is presented for transfer and the power of attorney on the back of the certificate is dated prior to the 1st day of July, 1898, although the name of the party to whom the stock is to be transferred is not filled in until after the 1st day of July, 1898, does the power of attorney require a revenue stamp, and also should the certificate be stamped?

You will please advise Mr. Miller that in the opinion of this office the transfer of the stock referred to was not completed prior to the 1st of July, 1898. The stock had been purchased and the certificate had been indorsed in blank and delivered before the 1st of July, 1898, and the stock had not been transferred upon the corporate books. After the 1st of July, upon request of the holder of the certificate to enter the transfer on the books of the company, the certificate is surrendered and the blank power of attorney on the back of the certificate filled in, and thereupon the stock is transferred upon the books of the company to the purchaser. This office holds that, under the circumstances herein before described, the certificate when surrendered for transfer after July 1, 1898, should be stamped at the rate of 2 cents per $100 or fraction thereof of par value, and the power of attorney on the back of the certificate requires a 25-cent stamp.

Respectfully, yours,

ROBT. WILLIAMS, Jr.,

Acting Commissioner.

Mr. C. H. TREAT, Collector Second District, New York, N. Y.

(21315.)

Stamp tax-Taxes on transfers of shares of stock.

All transfers taxable, but if transfer is made pursuant to a sale, where the memorandum of sale has been duly stamped, no extra tax accrues.-All transfers of stock in pursuance of gifts, bequests, successions, or conveyances by trustees taxable.

TREASURY DEPARTMENT,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington, D. C., June 27, 1899. SIR: In reply to your letter of the 14th instant, relative to the stamp tax on transfers of shares of stock, I have to advise you that this office holds that the law imposes a tax (1) on every sale of stock, (2) on every agreement to sell stock, and (3) on every transfer of stock. But when the agreement to sell results in a sale, or when a sale results in a transfer, there is no double tax, because the stamped memorandum of sale or agreement to sell secures the transfer without stamping the certificate of shares to be transferred.

When a transfer of stock is not the result of a sale or an agreement to sell, the certificate of shares must be stamped according to its par value in order to effect the transfer on the books of the corporation. Such transfers are generally in pursuance of gifts, bequests, successions, or conveyances by trustees to cestui que trusts.

There is no other feasible rule than to consider the person in whose name the stock stands as the owner of the legal title, and any transfer to another name as a transfer taxable under the law.

In the case you mention where stock stands in the name of A, but really belongs to B, with whose money it was bought, no relief can be

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