L. Heller & Son, Inc. v. Commissioner
United States Tax Court
Petitioner's payment of debts of subsidiary which had undergone 77B reorganization, the name, business, and creditors of subsidiary being closely related to petitioner, which was concerned with restoring its credit standing, held deductible either as an ordinary and necessary business expense or as a loss. Scruggs-Vandervoort-Barney, Inc., 7 T. C. 779, followed.
1Opinion of the Court
OPINION.
Opper, Judge:
There is evidence from which it may be concluded that petitioner’s promise to some of the creditors of its subsidiary to make good their losses on the subsidiary’s 77B reorganization was contemporaneous with the latter proceeding, and that the consent of the creditors to the reorganization was a consideration for petitioner’s undertaking. If so, the payment by petitioner was pursuant to a contractual obligation, notwithstanding the principal debtor’s discharge, see Abraham Greenspon, 8 T. C. 431; Welch v. Helvering, 290 U. S. 111, footnote 1; and deduction' as a loss of…
2Cases cited4 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Scruggs-Vandervoort-Barney, Inc. v. CommissionerUnited States Tax Court · 1946
- Farr v. CommissionerUnited States Tax Court · 1948
- Catholic News Publishing Co. v. CommissionerUnited States Tax Court · 1948
3Cited by60 opinions
- Lohrke v. CommissionerUnited States Tax Court · 1967
- Young & Rubicam, Inc. v. The United StatesUnited States Court of Claims · 1969
- Santa Anita Consol., Inc. v. CommissionerUnited States Tax Court · 1968
- Snow v. CommissionerUnited States Tax Court · 1958
- Dinardo v. CommissionerUnited States Tax Court · 1954
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