Apollo Industries, Inc. v. Commissioner
United States Tax Court
The petitioner's predecessor was engaged in the business of manufacturing cigars. It also processed some of the tobacco used in its cigars. New machinery for the manufacture of a new product known as "reconstituted tobacco" was being developed and it was the plan of the predecessor corporation to acquire and incorporate such equipment into its operations when it was perfected and to expand its plant to accommodate such added operation.
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The petitioner's predecessor was engaged in the business of manufacturing cigars. It also processed some of the tobacco used in its cigars. New machinery for the manufacture of a new product known as "reconstituted tobacco" was being developed and it was the plan of the predecessor corporation to acquire and incorporate such equipment into its operations when it was perfected and to expand its plant to accommodate such added operation. For each of the taxable years herein the corporation accumulated all of its earnings and profits, which it is here claimed were required for the purchase of…
1Opinion of the Court
OPINION
Turner, Judge:
Under sections 531 and 532 of the Internal Revenue Code of 1954, an accumulated earnings tax is imposed upon a corporation “formed or availed of for the purpose of avoiding the income tax with respect to its shareholders * * * by permitting earnings and profits to accumulate instead of being divided or distributed.” In section 533 it is provided that “the fact that the earnings and profits of a corporation are permitted to accumulate beyond the reasonable needs of the business shall be determinative of the purpose to avoid the income tax with respect to shareholders,…
2Cases cited9 opinions
- Helvering v. National Grocery Co.Supreme Court of the United States · 1938
- Dixie, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1960
- The Smoot Sand & Gravel Corporation v. Commissioner of Internal RevenueCourt of Appeals for the Fourth Circuit · 1957
- Dixie, Inc. v. CommissionerUnited States Tax Court · 1958
- J. L. Goodman Furniture Co. v. CommissionerUnited States Tax Court · 1948
4 more not listed; retrieve them via the Exa API.
3Cited by8 opinions
- Magic Mart, Inc. v. CommissionerUnited States Tax Court · 1969
- Alabama Coca-Cola Bottling Co. v. CommissionerUnited States Tax Court · 1969
- Suwannee Lumber Mfg. Co. v. CommissionerUnited States Tax Court · 1979
- Apollo Industries, Inc. v. CommissionerUnited States Tax Court · 1965
- Deviney Constr. Co. v. CommissionerUnited States Tax Court · 1976
3 more not listed; retrieve them via the Exa API.