Commissioner of Internal Revenue v. British Motor Car Distributors, Ltd., a Corporation

MERRILL, Circuit Judge.

The taxpayer corporation incurred losses while engaged in the business of selling home appliances. It disposed of all its assets and the corporate shares were then sold to new owners, who used the corporation to operate a previously going automobile business. The question here presented is whether the taxpayer is entitled to carry over the losses incurred in the old business, where it is clear that the principal purpose of the acquisition of the taxpayer by the new owners was to avoid taxes. The Tax Court, five judges dissenting, ruled in the affirmative, 31 T.C. 437…