Sherwood Properties v. Commissioner
United States Tax Court
Freedland owned 89 percent of the stock of Freedland Ltd., a Canadian corporation. Freedland owned 50.01 percent and Sherwood owned 49.99 percent of the stock of Huron, a Canadian corporation. In June 1977, Huron sold all of its assets for $ 1 million. In July and August 1977, Huron advanced Freedland $ 500,000. Testimony was provided that the advances were to be used by Freedland to maintain the steel allocations of Huron in the United States.
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Freedland owned 89 percent of the stock of Freedland Ltd., a Canadian corporation. Freedland owned 50.01 percent and Sherwood owned 49.99 percent of the stock of Huron, a Canadian corporation. In June 1977, Huron sold all of its assets for $ 1 million. In July and August 1977, Huron advanced Freedland $ 500,000. Testimony was provided that the advances were to be used by Freedland to maintain the steel allocations of Huron in the United States. However, Freedland treated the advances on its books as loans payable which were ultimately repaid in April and May 1979. Held: The advances…
1Opinion of the Court
GOFFE, Judge:
The Commissioner determined a deficiency in petitioner Sherwood Properties, Inc.’s Federal income tax for the taxable year ended June 30, 1978, in the amount of $128,650.79. The Commissioner also determined a deficiency in petitioner Freedland Industries Corp.’s Federal income tax for the taxable year ended June 30, 1976, in the amount of $141,283.67.1 After concessions,2 the issues for decision are: (1) Whether advances to petitioner Freedland Industries Corp. by a Canadian corporation owned by petitioners constituted an investment in U.S. property within the meaning of section…
2Cases cited20 opinions
- Jack E. Golsen and Sylvia H. Golsen v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1971
- Automobile Club of Mich. v. CommissionerSupreme Court of the United States · 1957
- Charles Ilfeld Co. v. HernandezSupreme Court of the United States · 1934
- Pulllman's Palace Car Co. v. Missouri Pacific Railway Co.Supreme Court of the United States · 1885
- Central Railroad & Banking Co. v. GeorgiaSupreme Court of the United States · 1876
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3Cited by4 opinions
- Pagel, Inc. v. CommissionerUnited States Tax Court · 1988
- Pagel, Inc. v. CommissionerUnited States Tax Court · 1988
- Paxton v. CommissionerUnited States Tax Court · 1991
- Sherwood Properties v. CommissionerUnited States Tax Court · 1987