Crean Bros., Inc. v. Commissioner
United States Tax Court
1. Excess Profits Tax -- Equity Invested Capital -- Property Contributed -- Basis -- Section 718 (a) (2). -- The cancellation of indebtedness can not increase equity invested capital under section 718 (a) (2) since the debtor has no basis for loss on a debt after it has been canceled. 2. Id. -- The cancellation of a debt by a non-stockholder of an insolvent debtor, which improves the financial statement of the debtor so that it no longer shows insolvency but merely impaired…
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1. Excess Profits Tax -- Equity Invested Capital -- Property Contributed -- Basis -- Section 718 (a) (2). -- The cancellation of indebtedness can not increase equity invested capital under section 718 (a) (2) since the debtor has no basis for loss on a debt after it has been canceled. 2. Id. -- The cancellation of a debt by a non-stockholder of an insolvent debtor, which improves the financial statement of the debtor so that it no longer shows insolvency but merely impaired capital, does not increase equity invested capital.
1Opinion of the Court
OPINION.
Murdock, Judge:
The Commissioner determinen a qenciency of $14,434.23 in the excess profits tax of the petitioner for 1945. The only issue for decision is whether the Commissioner erred in excluding from equity invested capital for the years 1943, 1944, and 1945, $99.965.05 alleged to represent paid-in surplus or a contribution to capital, resulting from the forgiveness of an indebtedness in 1938. The facts are.not in dispute and a written stipulation, supplemented by all exhibits introduced in evidence, is adopted as the findings of fact.
The petitioner, a Pennsylvania corporation…
2Cases cited4 opinions
- Brown Shoe Co. v. CommissionerSupreme Court of the United States · 1950
- West Constr. Co. v. CommissionerUnited States Tax Court · 1946
- Doylestown & Easton Motor Coach Co. v. CommissionerUnited States Tax Court · 1947
- Walsh Holyoke Steam Boiler Works, Inc. v. CommissionerUnited States Tax Court · 1945
3Cited by11 opinions
- Times Tribune Co. v. CommissionerUnited States Tax Court · 1953
- Crean Bros., Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 1952
- Akron Dry Goods Co. v. CommissionerUnited States Tax Court · 1952
- Prosperity Co. v. CommissionerUnited States Tax Court · 1951
- Akron Dry Goods Co. v. CommissionerUnited States Tax Court · 1952
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