Northern Coal & Dock Co. v. Commissioner
United States Tax Court
Where insolvent, wholly owned subsidiary corporation transferred all its assets to its creditor parent for credit on its indebtedness, leaving an unpaid balance of indebtedness, held, that the provisions of section 112 (b) (6) of the Internal Revenue Code do not apply and that the subsidiary may claim a deductible loss on the assets transferred, provided that fair market value was given to transferred assets as a basis for credit on a genuine indebtedness.
1Opinion of the Court
OPINION.
LeMire, Judge:
The principal issue in this case is whether the petitioner incurred deductible losses in the fiscal year ended April 30, 1945, on the transfer of its assets to its parent company for credit on its current and funded indebtedness to the parent at amounts less than the agreed tax bases at which the properties were carried by petitioner.
The petitioner claims that the transfers amounted, in legal effect, to sales at less than cost basis to petitioner, adjusted for depreciation, on which the petitioner sustained deductible losses just as if it had sold the properties to a…
2Cases cited2 opinions
- Commissioner v. Court Holding Co.Supreme Court of the United States · 1945
- Iron Fireman Mfg. Co. v. Comm'rUnited States Tax Court · 1945
3Cited by13 opinions
- C. M. Gooch Lumber Sales Co. v. CommissionerUnited States Tax Court · 1968
- Swiss Colony, Inc. v. CommissionerUnited States Tax Court · 1969
- Spaulding Bakeries, Inc. v. CommissionerUnited States Tax Court · 1957
- Commissioner of Internal Revenue v. Spaulding Bakeries IncorporatedCourt of Appeals for the Second Circuit · 1958
- Waterman Steamship Corporation v. United StatesDistrict Court, S.D. Alabama · 1962
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