concurring: I concur in the result reached by the majority opinion. Once, it is determined that a gift was intended, I would hold that such a transfer by a stockholder to a corporation is a gift to the other stockholders.1 Respondent’s own regulations confirm this principle. See Gift Tax Regs., sec. 25.2511-1 (h) (1). And Congress, in enacting the 1951 Code, similarly confirmed this principle in its discussion of a possible gift in connection with a transfer under section 351. S. Rept. No. 1622, to accompany H.R. 8300 (Pub. L. 591), 83d Cong., 2d Sess., p. 264 (1954) ; PI. Rept. No. 1337, to accompany PI.R. 8300 (Pub. L. 591), 83d Cong., 2d Sess., p. A-117 (1954). I do not agree that there is a difference, in these circumstances, between a transfer by a stockholder to a corporation of its own shares and a transfer of other property, allegedly based on the theory that in the former case there is a proportionate increase in the interests of the other stockholders while the latter case involves merely an increase in the value of the stockholders’ existing interests. To the extent that Diebold v. Commissioner, 194 F. 2d 266 (C.A. 3, 1952), reversing a Memorandum Opinion of this Court, adopts such a distinction, I would not follow it. Furthermore, to the extent that Frank B. Thompson, 42 B.T.A. 121 (1940), and Stephen F. Heringer, 21 T.C. 607 (1954), affirmed on other grounds 235 F. 2d 149 (C.A. 9, 1956), are inconsistent with the principle set forth above, I would not follow them. In this connection, it is of interest to note that both the Thompson and Her-inger cases were decided before respondent promulgated the gift tax regulation cited above in 1958. See 1958-2 C.B. 627 et seq.
Since the shares actually ended up in the hands of the corporation, I would view the transaction in its entirety as encompassing a gift to the other stockholders followed by a prorata contribution to capital by all the stockholders.