Baan v. Commissioner
United States Tax Court
Pacific corporation was engaged in the telephone business in California and other western States. It transferred to Northwest, a newly created subsidiary, the assets used in the telephone business conducted in Oregon, Washington, and Idaho. It thus became the owner of all of the Northwest stock which it subsequently distributed through the medium of short-term rights issued to its stockholders.
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Pacific corporation was engaged in the telephone business in California and other western States. It transferred to Northwest, a newly created subsidiary, the assets used in the telephone business conducted in Oregon, Washington, and Idaho. It thus became the owner of all of the Northwest stock which it subsequently distributed through the medium of short-term rights issued to its stockholders. Held, the transaction was a tax-free spin-off under section 355, I.R.C. 1954, and petitioner-stockholders who obtained Northwest stock by exercising their rights did not thereby realize taxable income…
1Opinion of the Court
OPINION
Raum, Judge:
American Telephone & Telegraph Co. (American), a New York corporation, owned all of the stock or at least a controlling interest in the stock of some 21 corporations engaged in the business of furnishing telephone and other communications services within the United States. In the aggregate, American and its various subsidiaries comprise what is sometimes referred to as the Bell System. Its stock ownership in its west coast subsidiary, Pacific Telephone & Telegraph Co. (Pacific), represented some 89 percent of the latter’s voting control. The minority shares in Pacific were…
2Cases cited9 opinions
- Helvering v. HorstSupreme Court of the United States · 1940
- Commissioner v. LoBueSupreme Court of the United States · 1956
- Commissioner v. SmithSupreme Court of the United States · 1945
- Palmer v. CommissionerSupreme Court of the United States · 1937
- Choate v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1942
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3Cited by5 opinions
- Gerald R. Redding and Dorothy M. Redding and Thomas W. Moses and Anne M. Moses v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1980
- Redding v. CommissionerUnited States Tax Court · 1979
- Baan v. CommissionerUnited States Tax Court · 1965
- Gerald R. Redding and Dorothy M. Redding and Thomas W. Moses and Anne M. Moses v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1980
- Redding v. CommissionerUnited States Tax Court · 1979