UFE, Inc. v. Commissioner
United States Tax Court
In an arm's-length agreement, newly formed P acquired substantially all of the assets of an ongoing division of K for $ 14 million. The purchased assets included raw materials, work in progress, finished inventory, and accounts receivable. P elected to use the LIFO method of accounting. P and K agreed to allocate $ 50,000 of the purchase price to the cost of goodwill but did not discuss going-concern value. P continued the business activity of the purchased division.
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In an arm's-length agreement, newly formed P acquired substantially all of the assets of an ongoing division of K for $ 14 million. The purchased assets included raw materials, work in progress, finished inventory, and accounts receivable. P elected to use the LIFO method of accounting. P and K agreed to allocate $ 50,000 of the purchase price to the cost of goodwill but did not discuss going-concern value. P continued the business activity of the purchased division. After the sale, P obtained an appraisal of the purchased assets that showed a fair market value of $ 25 million. Held, P…
1Opinion of the Court
Williams, Judge:
The Commissioner determined a deficiency in petitioner’s Federal income tax for the taxable year ending March 31, 1981, in the amount of $651,084. By amendment to answer, respondent asserts that an additional unspecified deficiency is due for the same taxable year.
The issues we must decide are (1) whether petitioner correctly included in its LIFO inventory pool the finished inventory that was purchased simultaneously with all the assets of an ongoing manufacturing business purchased by petitioner, (2) whether petitioner acquired intangible going-concern value, and (3) whether…
2Cases cited31 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Bixby v. CommissionerUnited States Tax Court · 1972
- Thor Power Tool Co. v. CommissionerSupreme Court of the United States · 1979
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- Jack Daniel Distillery, Lem Motlow, Prop., Inc. v. The United StatesUnited States Court of Claims · 1967
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