477 F.2d 599
73-2 USTC  P 9640
NOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.Wayne E. Brown and Mary Ruth Brown, Plaintiffs-Appellantsv.United States of America, Defendants-Appellees.
72-2020.
United States Court of Appeals, Sixth Circuit.
April 30, 1973.

Before EDWARDS and CELEBREZZE, Circuit Judges, and O'SULLIVAN, Senior Circuit Judge.

Order

1
On receipt and consideration of the briefs and oral arguments in the above-styled case;  and


2
Noting that appellants (taxpayers), owners of 99.3% of the voting stock of the Big Bear Stores Company, argue that the sum of $21,000 paid for redemption of 200 shares of preferred stock in 1964 (which stock had originally been received as a stock dividend in 1950) should be taxed on the basis of a capital gain;  and


3
Further noting that the District Judge, properly employing the "net effect" test of United States v. Davis, 397 U.S. 301 (1970), held that "we can only conclude that the redemption of taxpayers' preferred stock, no matter how fortuitous, did not meaningfully reduce their proportionate interest in the corporation, and that therefore, ... the cash received for such stock cannot qualify for capital gains treatment."


4
The judgment of the District Court is affirmed.

