Ready Paving & Constr. Co. v. Commissioner
United States Tax Court
Petitioner did paving contract work for municipalities and was paid interest-bearing warrants, the fair market value of which was 92 to 96 percent of face value. At the end of each of the years 1966 and 1967 petitioner had current assets as shown by its books which listed the warrants as current assets in excess of current liabilities in an amount more than required for its working capital needs and other reasonable needs of its business.
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Petitioner did paving contract work for municipalities and was paid interest-bearing warrants, the fair market value of which was 92 to 96 percent of face value. At the end of each of the years 1966 and 1967 petitioner had current assets as shown by its books which listed the warrants as current assets in excess of current liabilities in an amount more than required for its working capital needs and other reasonable needs of its business. If the warrants are eliminated from petitioner's current assets, its net available current assets are less than the reasonable needs of its business. Held,…
1Opinion of the Court
OPINION
Scott, Judge:
Respondent determined deficiencies in accumulated-earnings taxes of petitioner for the taxable years ending- December 31, 1966 and 1967, in the respective amounts of $10,468.54 and $5,890.08. The only issue for decision is whether petitioner was availed of for the purpose of avoiding additional Federal income taxes with respect to its shareholders in each of the years in issue.
All the facts have been stipulated and all the stipulated facts together with the exhibits attached to the stipulation are found accordingly. We will, however, set forth herein those facts we…
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