Iron Fireman Mfg. Co. v. Comm'r
United States Tax Court
1. Petitioner, for several years prior to 1940, owned all of the stock of two subsidiary companies, A and B. During some of the earlier years losses sustained by A were deducted in consolidated returns. As the result of its operations, A had become indebted to petitioner in a substantial amount; but its stock was not worthless.
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1. Petitioner, for several years prior to 1940, owned all of the stock of two subsidiary companies, A and B. During some of the earlier years losses sustained by A were deducted in consolidated returns. As the result of its operations, A had become indebted to petitioner in a substantial amount; but its stock was not worthless. In 1940 A transferred all of its assets to B in consideration of the assumption by B of $ 250,000 of the indebtedness owing by it to petitioner and the payment of the $ 15,950.84 in cash. A was then dissolved. Petitioner credited the aggregate $ 265,950.84 against the…
1Opinion of the Court
OPINION.
Mellott, Judge:
The first question is whether respondent properly disallowed a deduction of $11,823.12 representing the net long term capital loss claimed by petitioner for the year 1940 on its investment in the capital stock of the St. Louis Co., a wholly owned subsidiary.
Petitioner concedes that on the basis of the stipulated facts, the substance of which is shown in our findings, the stock of St. Louis Co. had no actual liquidating value at the beginning of the year 1940. At that time the total assets were approximately $306,000 and the liabilities $348,000 — a difference of…
2Cases cited4 opinions
- United States v. DickersonSupreme Court of the United States · 1940
- Bonwit Teller & Co. v. United StatesSupreme Court of the United States · 1931
- William Leveen Corp. v. CommissionerUnited States Tax Court · 1944
- Green Bay Lumber Co. v. CommissionerUnited States Tax Court · 1944
3Cited by24 opinions
- Anthony P. Miller, Inc. v. CommissionerUnited States Tax Court · 1946
- E. B. & A. C. Whiting Co. v. CommissionerUnited States Tax Court · 1948
- Swiss Colony, Inc. v. CommissionerUnited States Tax Court · 1969
- Pacific Gas & Electric Co. v. CommissionerUnited States Tax Court · 1946
- Spaulding Bakeries, Inc. v. CommissionerUnited States Tax Court · 1957
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