Keystone Wood Products Co. v. Commissioner
United States Board of Tax Appeals
1. A valuation of the rights of one party to a bilateral contract based on promises to deliver and to receive and pay for raw material, which assumes the profit to be derived from the manufacturing business for the life of the contract based upon an estimate of the probable quantity of such raw material to be supplied, reduces such assumed profit to an average per unit of raw material, and attributes such profit to the supply contract, is unsound. 2. The opinions of…
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1. A valuation of the rights of one party to a bilateral contract based on promises to deliver and to receive and pay for raw material, which assumes the profit to be derived from the manufacturing business for the life of the contract based upon an estimate of the probable quantity of such raw material to be supplied, reduces such assumed profit to an average per unit of raw material, and attributes such profit to the supply contract, is unsound. 2. The opinions of witnesses as to the value of petitioner's rights in such a contract are not compelling evidence of such value when the method of…
1Opinion of the Court
*1120 OPINION.
Sternhagen:
The first question for decision is whether as a matter of law and by virtue of the facts in evidence the petitioner is entitled to include in its statutory invested capital as defined in sections 325 and 326, Revenue Act of 1918, any amount as the value of its rights as assignee of the contract of June 21, 1912. Two witnesses testified for petitioner that in their opinion the contract was at the time of assignment and on March 1, 1913, worth $800,000, and another testified to his opinion of a value of $1,300,000. There are, however, facts in evidence which we think…
2Cases cited3 opinions
- The ConquerorSupreme Court of the United States · 1897
- LaBelle Iron Works v. United StatesSupreme Court of the United States · 1921
- Head v. HargraveSupreme Court of the United States · 1882
3Cited by7 opinions
- Jarre v. CommissionerUnited States Tax Court · 1975
- Cupler v. CommissionerUnited States Tax Court · 1975
- Akers v. CommissionerUnited States Tax Court · 1984
- Cupler v. CommissionerUnited States Tax Court · 1975
- Estate of Burns v. Comm'rUnited States Tax Court · 1947
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