Bixby v. Commissioner
United States Tax Court
1. Petitioner Converse Rubber Corp. caused certain Bermuda trusts to be interposed in a transaction between itself and a seller of the assets of another corporation, Tyer. In form, the seller sold the assets to Bermuda trusts for x dollars and the trusts resold the assets to petitioner for x + y dollars; and y dollars was paid to the trusts in long-term highly subordinated notes.
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1. Petitioner Converse Rubber Corp. caused certain Bermuda trusts to be interposed in a transaction between itself and a seller of the assets of another corporation, Tyer. In form, the seller sold the assets to Bermuda trusts for x dollars and the trusts resold the assets to petitioner for x + y dollars; and y dollars was paid to the trusts in long-term highly subordinated notes. The accounts receivable of Tyer, which were guaranteed by Tyer, were entered on petitioner's books at face value. Held, the three-party purchase transaction was a sham. In substance, petitioner purchased the assets…
1Opinion of the Court
Dawson, Jtidge:
These consolidated cases involve deficiencies in the Federal income tax of each of the individual petitioners for the taxable year 1961, of Converse Rubber Corp. for the taxable years ended December 30, 1961, and December 29,1962, and of Tyer Rubber Corp. and Granite State Rubber Co. for the taxable year ended December 29, 1962. The deficiencies determined by respondent are as follows:
Petitioners Docket No. Year ended Deficiency
Mark and Hudythe Bixby.-. 4085-65 1961 $105,293.68
Reva G. Stone, deceased. 5104-65 1961 90,392.04
Dewey D. and Anne A. Stone.. 5105-65 1961 91,127.76
Phili…
2Cases cited80 opinions
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