Canaveral Int'l Corp. v. Commissioner
United States Tax Court
1. P, the parent of an affiliated group of corporations, initially negotiated to exchange some of its stock for a yacht which was convertible to business use. On discovering that the yacht was owned by corporation N and that the yacht and its furnishings had an undepreciated basis of $ 769,632.75, P instead acquired all of N's stock, in August 1962, in exchange for some of P's nonvoting preferred stock.
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1. P, the parent of an affiliated group of corporations, initially negotiated to exchange some of its stock for a yacht which was convertible to business use. On discovering that the yacht was owned by corporation N and that the yacht and its furnishings had an undepreciated basis of $ 769,632.75, P instead acquired all of N's stock, in August 1962, in exchange for some of P's nonvoting preferred stock. As an affiliate of P, N improved the yacht and unsuccessfully attempted to charter it for commercial purposes until December 1963, when N sold the yatch for $ 250,000. The consolidated return…
1Opinion of the Court
Feati-ierstoN, Judge:
Respondent determined a deficiency in petitioner’s Federal income tax and that of its affiliated companies for the taxable year ended September 30, 1966, in the amount of $159,431.48. By stipulation the parties have settled most of the issues outlined in the notice of deficiency, leaving for decision the following questions:(1) Whether the principal purpose motivating petitioner’s acquisition of the stock of Norango, Inc., was the evasion or avoidance of Federal income tax within the meaning of section 269;1(2) What is the adjusted basis under section 1011 for computing…
2Cases cited33 opinions
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