Evansville Courier v. Commissioner
United States Board of Tax Appeals
1. Petitioner's contention, that its income was overstated in the amount of $15,000, denied. 2. Petitioner acquired a mixture of tangible and intangible assets for its capital stock and cash. Held, that for the purpose of determining the amount of intangibles acquired for stock to be used in the application of the 25 per cent limitation on intangibles, the cash, in the absence of evidence to the contrary, should be considered as having been paid for the tangibles.
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1. Petitioner's contention, that its income was overstated in the amount of $15,000, denied. 2. Petitioner acquired a mixture of tangible and intangible assets for its capital stock and cash. Held, that for the purpose of determining the amount of intangibles acquired for stock to be used in the application of the 25 per cent limitation on intangibles, the cash, in the absence of evidence to the contrary, should be considered as having been paid for the tangibles. Petitioner's contention, that the cash should be allocated between the two classes of assets in proportion to their cash value…
1Opinion of the Court
*867OPINION.
Love:
The first issue is whether petitioner’s income for the 11-month period ending December 31,1920, is overstated in the amount of $15,000.
*868Petitioner contends that the provision in its bill of sale from Marshall wherein it is recited that Marshall “ hereby pays ” to petitioner $15,000 in cash “ to cover the unearned part of prepaid newspaper subscriptions ” clearly shows that the $15,000 was nothing more than a reduction in the purchase price of the property and assets from Marshall, and that both petitioner and respondent were in error in treating the $15,000 as income. Petitioner,…
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