Capital Sales, Inc. v. Commissioner
United States Tax Court
P corporation's principal operating asset was a franchise. The franchisor terminated P corporation's franchise and granted the franchise to S corporation, which was controlled by substantially the same people who controlled P corporation. Simultaneously therewith, P corporation sold its remaining operating assets to S corporation at book value and distributed its liquid assets to its shareholders in liquidation.
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P corporation's principal operating asset was a franchise. The franchisor terminated P corporation's franchise and granted the franchise to S corporation, which was controlled by substantially the same people who controlled P corporation. Simultaneously therewith, P corporation sold its remaining operating assets to S corporation at book value and distributed its liquid assets to its shareholders in liquidation. Held: These transactions do not constitute a reorganization within the meaning of sec. 368(a)(1)(D), I.R.C. 1954, because there was no transfer by P corporation of substantially all…
1Opinion of the Court
Scott, Judge:
Respondent determined deficiencies in petitioners’ Federal income tax for the years and in the amounts as follows:
Petitioners FYE Deficiencies
Capital Sales, Inc . Sept. 30, 1973 $2,960.83
Joseph and Jonnie H. Simon Dec. 31, 1974 4,175.00
Warner L. and Hazel Mathis Dec. 31, 1974 13,267.00
John M. Beard, Jr . Dec. 31, 1974 4,621.00
The issues for decision are:(1) Whether transactions between Capital Sales, Inc., and Southern Sash Supply Co., both of which were corporations owned by the same shareholders, constituted a reorganization under section 368(a)(1)(D), I.R.C. 1954,2 so that…
2Cases cited14 opinions
- Helvering v. Alabama Asphaltic Limestone Co.Supreme Court of the United States · 1942
- J. E. Davant and Kathryn Davant v. Commissioner of Internal Revenue, Commissioner of Internal Revenue v. J. E. Davant and Kathryn DavantCourt of Appeals for the Fifth Circuit · 1966
- American Bantam Car Co. v. CommissionerUnited States Tax Court · 1948
- South Texas Rice Warehouse Co. v. CommissionerUnited States Tax Court · 1965
- James Armour, Inc. v. CommissionerUnited States Tax Court · 1964
9 more not listed; retrieve them via the Exa API.
3Cited by10 opinions
- Crown v. CommissionerUnited States Tax Court · 1981
- Rutter v. CommissionerUnited States Tax Court · 1983
- Suwannee Lumber Mfg. Co. v. CommissionerUnited States Tax Court · 1979
- Capital Sales, Inc. v. CommissionerUnited States Tax Court · 1978
- Crown v. CommissionerUnited States Tax Court · 1981
5 more not listed; retrieve them via the Exa API.