Auto Finance Co. v. Commissioner
United States Tax Court
Petitioner was the controlling stockholder of two automobile dealer corporations. As part of a plan to dispose of its entire interest in each company at its book value, petitioner caused each company to distribute a preferred stock dividend of a total par value about equal to its accumulated earnings or profits.
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Petitioner was the controlling stockholder of two automobile dealer corporations. As part of a plan to dispose of its entire interest in each company at its book value, petitioner caused each company to distribute a preferred stock dividend of a total par value about equal to its accumulated earnings or profits. At each closing transaction at which it disposed of its entire interest in each company, petitioner's common stock was purchased by minority stockholders and others, and its preferred stock of one company was redeemed and that of the other was in part redeemed and in part transferred…
1Opinion of the Court
OPINION.
Fishee, Judge:
The petitioner, a finance company, acquired controlling interests in two automobile dealer companies during World War II. After the war, in 1948, for various reasons, it desired to divest itself of these interests completely and to transfer control of the dealer companies to those persons who had been managing them. Each of the companies had been operating profitably. The earned surplus of each was substantial and the local managers were unable to raise capital sufficient to purchase petitioner’s interest at its then book value. Moreover, petitioner desired to receive…
2Cases cited5 opinions
- Boyle v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 1951
- Zenz v. QuinlivanCourt of Appeals for the Sixth Circuit · 1954
- Chamberlin v. CommissionerUnited States Tax Court · 1952
- Marie W. F. Nugent-Head Trust v. CommissionerUnited States Tax Court · 1951
- United Nat'l Corp. v. CommissionerUnited States Tax Court · 1943
3Cited by2 opinions
- Cummins Diesel Sales Corp. v. United StatesDistrict Court, S.D. Indiana · 1971
- Auto Finance Co. v. CommissionerUnited States Tax Court · 1955