David R. Webb Co. v. Commissioner
United States Tax Court
P acquired all the assets and liabilities of X, including the express assumption of the liability to pay an unfunded pension to G, the widow of a former employee. P made and deducted its payments to G. Held: P's payment of X's obligation to G was not an ordinary and necessary business expense. Rather, such payments, in the year paid, became part of P's cost basis in the assets it purchased from X.
1Opinion of the Court
OPINION
Simpson, Judge:
The Commissioner determined deficiencies in the petitioner’s Federal income taxes of $3,048 for 1973 and $1,407 for 1974. After the settlement of some of the issues, the sole issue for decision is whether payments by the petitioner in 1973 and 1974 pursuant to the petitioner’s assumption of an unfunded pension liability of a predecessor corporation were ordinary and necessary business expenses, or whether such payments were capital expenditures.
All of the facts have been stipulated, and those facts are so found.
The petitioner, David R. Webb Co., Inc., is a Delaware…
2Cases cited12 opinions
- United States v. Philip K. Smith, United States of America v. McIver & Smith Fabricators, Inc.Court of Appeals for the Fifth Circuit · 1969
- WD Haden Co. v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1948
- F. & D. Rentals, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1966
- F. & D. Rentals, Inc. v. CommissionerUnited States Tax Court · 1965
- Holdcroft Transp. Co. v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1946
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3Cited by11 opinions
- Meredith Corp. v. CommissionerUnited States Tax Court · 1994
- David R. Webb Company, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1983
- Herman v. CommissionerUnited States Tax Court · 1985
- Ill. Tool Works v. Comm'rUnited States Tax Court · 2001
- Gaines v. CommissionerUnited States Tax Court · 1982
6 more not listed; retrieve them via the Exa API.