Commissioner of Internal Revenue v. South Lake Farms, Inc., Commissioner of Internal Revenue v. South Lake Farms

I respectfully dissent.

The case presents a question of whether a farm corporation can avoid its liability for tax upon ordinary income earned by it but not actually collected or realized as of the date the corporation is dissolved by another corporation, which purchases all of its stock.

The problem concerns Sections 334 and 336, and the impact thereon of Sections 446 and 482, all in the 1954 Internal Revenue Code; and whether the tax principles of “Assignment of Income” and “Tax Benefit” should apply.

The “Old Corporation” expended large amounts for the making of a cotton crop, ($497,641.93)…