E. T. Renfro Drug Co. v. Commissioner
United States Tax Court
Where one of three partners sells his partnership interest to the other two partners, who thereby acquire all the partnership assets in equal proportion and the remaining partners then sell substantially all the partnership property to a corporation over 80 per cent of whose stock is owned in equal shares by the remaining partners, held, the income of the partnership during the base period years prior to the withdrawal of one partner can not be included in the base period…
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Where one of three partners sells his partnership interest to the other two partners, who thereby acquire all the partnership assets in equal proportion and the remaining partners then sell substantially all the partnership property to a corporation over 80 per cent of whose stock is owned in equal shares by the remaining partners, held, the income of the partnership during the base period years prior to the withdrawal of one partner can not be included in the base period income of the corporation for excess profits tax purposes. Regulations 112, section 35.740-4, approved.
1Opinion of the Court
OPINION.
Harlan, Judge:
Petitioner contends that it is entitled to include the base period net income of the Wren and Horn partnerships in computing its excess profits credit under the average earning method for the years 1940 to 1943, inclusive, as provided in sections 740 and 742 of the Internal Revenue Code. The pertinent provisions of these sections (and of section 112 (b) (5), referred to therein) are set forth in the margin.1
The Commissioner contends that the partnerships whose property was acquired by petitioner were the partnerships consisting only of Inez Eenfro and Inez Allen, and…
2Cases cited1 opinion
- Ransohoffs, Inc. v. CommissionerUnited States Tax Court · 1947
3Cited by15 opinions
- S. Klein on The Square, Inc. v. CommissionerUnited States Tax Court · 1950
- A. C. Burton & Co. v. CommissionerUnited States Tax Court · 1950
- Frederic R. Harris, Inc. v. CommissionerUnited States Tax Court · 1963
- Hawaiian Freight Forwarders, Ltd. v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1952
- E. T. Renfro Drug Co. v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1950
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