Carolina, C. & O. R. Co. v. Commissioner
United States Tax Court
1. P, a common carrier by rail, leased all of its railroad properties on a net basis for 999 years. The lessee purchased and retired outstanding bonds of P, and the amounts expended by the lessee were reflected in open accounts that P would, subject to other adjustments, be required to satisfy at the end of the 999-year lease.
Read the full summary
1. P, a common carrier by rail, leased all of its railroad properties on a net basis for 999 years. The lessee purchased and retired outstanding bonds of P, and the amounts expended by the lessee were reflected in open accounts that P would, subject to other adjustments, be required to satisfy at the end of the 999-year lease. Held, the indebtedness to the lessees differs so fundamentally from the original bond obligation that P may not treat one as a substitute for the other. 2. P claimed an investment credit for replacement property and additions and betterments (A-B property) constructed…
1Opinion of the Court
Wilbur, Judge:
Respondent determined the following deficiencies in the Federal income tax of the Carolina, Clinchfield & Ohio Railway Co.:
1972. $300,276.23
1973. 353,140.19
1974. 331,341.91
1975. ,476.515.98
Total. 1,461,274.31
The issues for our decision are (1) whether petitioner realized additional income from cancellation of indebtedness in the years at issue; (2) whether petitioner is entitled to claim an investment credit on additions, betterments, and replacements of its track structure made by its lessees; (3) whether petitioner’s election to exclude certain items from income under section…
2Cases cited38 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Old Colony Trust Co. v. CommissionerSupreme Court of the United States · 1929
- James v. United StatesSupreme Court of the United States · 1961
- Crane v. CommissionerSupreme Court of the United States · 1947
- United States v. Kirby Lumber CoSupreme Court of the United States · 1931
33 more not listed; retrieve them via the Exa API.
3Cited by12 opinions
- Michaels v. CommissionerUnited States Tax Court · 1986
- Kansas City S. Indus. v. CommissionerUnited States Tax Court · 1992
- Jelle v. CommissionerUnited States Tax Court · 2001
- Carolina, Clinchfield and Ohio Railway Company v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1987
- Rogers v. CommissionerUnited States Tax Court · 1990
7 more not listed; retrieve them via the Exa API.