Western Wine & Liquor Co. v. Commissioner
United States Tax Court
Taxpayer, a wholesale liquor dealer, found it difficult to procure liquor in 1943 because of Government restrictions on production. Taxpayer's officers learned that American Distilling Company was offering its stockholders the privilege of purchasing their proportionate shares of its bulk whisky inventory at cost. Taxpayer bought shares of this stock in 1943 and 1944, exercised the right to acquire the whisky, and sold the stock in 1944 at a loss.
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Taxpayer, a wholesale liquor dealer, found it difficult to procure liquor in 1943 because of Government restrictions on production. Taxpayer's officers learned that American Distilling Company was offering its stockholders the privilege of purchasing their proportionate shares of its bulk whisky inventory at cost. Taxpayer bought shares of this stock in 1943 and 1944, exercised the right to acquire the whisky, and sold the stock in 1944 at a loss. Held, the loss was a part of the cost of the whisky and not a short term capital loss. Held, further, the shares of stock were not capital assets…
1Opinion of the Court
opinion.
Tietjens, Judge:
Shall we for tax purposes split what is obviously an integrated transaction into a series of splinters; in other words, “atomize” the transaction, as put by Judge Learned Hand in Helvering v. New Haven & S. L. R. Co., 121 F. 2d 985, or shall we look to what we consider to be the “substance” of the plan and “view it as a whole” ?
Respondent’s position is that the purchase and sale of the stock was one transaction and the acquisition and sale of the whisky was another and that the two are not to be treated as one; that taxpayer sustained a short term capital loss on the…
2Cases cited6 opinions
- Commissioner of Internal Revenue v. Ashland Oil & Refining Co.Court of Appeals for the Sixth Circuit · 1938
- Prairie Oil & Gas Co. v. MotterCourt of Appeals for the Tenth Circuit · 1933
- Sackstein v. CommissionerUnited States Tax Court · 1950
- Helvering v. New Haven & S. L. R.Court of Appeals for the Second Circuit · 1941
- Tube Bar, Inc. v. CommissionerUnited States Tax Court · 1950
1 more not listed; retrieve them via the Exa API.
3Cited by63 opinions
- Enoch v. CommissionerUnited States Tax Court · 1972
- J. E. Davant and Kathryn Davant v. Commissioner of Internal Revenue, Commissioner of Internal Revenue v. J. E. Davant and Kathryn DavantCourt of Appeals for the Fifth Circuit · 1966
- Commissioner of Internal Revenue v. The Bagley & Sewall Co.Court of Appeals for the Second Circuit · 1955
- Steadman v. Comm'rUnited States Tax Court · 1968
- E. I. Du Pont De Nemours and Company v. United StatesUnited States Court of Claims · 1961
58 more not listed; retrieve them via the Exa API.