Arkansas Best Corp. v. Commissioner
United States Tax Court
In 1968, petitioner ABC, a diversified holding company, acquired approximately 65 percent of the stock of NBC, a bank. The transaction was intended by ABC and accepted by the Internal Revenue Service as a tax-free corporate reorganization under sec. 368(a)(1)(C), I.R.C. 1954. ABC acquired additional shares of NBC stock during the period 1969-76 by purchase, capital calls, and stock dividends.
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In 1968, petitioner ABC, a diversified holding company, acquired approximately 65 percent of the stock of NBC, a bank. The transaction was intended by ABC and accepted by the Internal Revenue Service as a tax-free corporate reorganization under sec. 368(a)(1)(C), I.R.C. 1954. ABC acquired additional shares of NBC stock during the period 1969-76 by purchase, capital calls, and stock dividends. Legislation enacted by Congress subsequent to 1968 regulating bank holding companies, effectively required ABC to divest itself of the NBC stock. ABC sold 51 percent of NBC's stock in 1975 for cash and a…
1Opinion of the Court
Nims, Judge-.
Respondent determined deficiencies in petitioner’s Federal income tax as follows:
Year Deficiency
1969 $20,224
1970 20,224
1971 50,560
1972 3,355,968
Year Deficiency
1973 $244,352
1974 230,519
1975 928,911
1976 2,077,163
After concessions, the issues presented for decision are (1) whether petitioner’s loss on the sale of its controlling interest in a bank is ordinary or capital loss, (2) whether the bank stock was acquired in a transaction qualifying as a tax-free reorganization under section 368(a)(1)(C),1 and (3) whether petitioner is entitled to a bad debt deduction for the partial…
2Cases cited26 opinions
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- Higgins v. CommissionerSupreme Court of the United States · 1941
- Whipple v. CommissionerSupreme Court of the United States · 1963
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- Booth Newspapers, Inc. v. The United States. The Evening News Association v. The United StatesUnited States Court of Claims · 1962
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3Cited by26 opinions
- Recklitis v. CommissionerUnited States Tax Court · 1988
- Arkansas Best Corp. v. CommissionerSupreme Court of the United States · 1988
- Cluck v. CommissionerUnited States Tax Court · 1995
- LeFever v. CommissionerCourt of Appeals for the Tenth Circuit · 1996
- Cassuto v. CommissionerUnited States Tax Court · 1989
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