Roth Steel Tube Co. v. Commissioner
United States Tax Court
Petitioner purchased 62 percent of the stock of a subsidiary corporation for $553,062. Petitioner made advances to the subsidary in the amount of $3,420,000. The subsidiary ceased operations. Petitioner claimed that its loss on the amount paid to purchase the stock of the subsidiary was ordinary under the Corn Products doctrine.
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Petitioner purchased 62 percent of the stock of a subsidiary corporation for $553,062. Petitioner made advances to the subsidary in the amount of $3,420,000. The subsidiary ceased operations. Petitioner claimed that its loss on the amount paid to purchase the stock of the subsidiary was ordinary under the Corn Products doctrine. Further, petitioner claimed that it was entitled to a deduction for a bad debt loss for the amount of the advances which were outstanding at the time the subsidiary ceased operations. Respondent determined that these amounts represent an investment in the subsidiary…
1Opinion of the Court
ROTH STEEL TUBE COMPANY, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Roth Steel Tube Co. v. Commissioner
Docket No. 517-78.
United States Tax Court
T.C. Memo 1985-58; 1985 Tax Ct. Memo LEXIS 575; 49 T.C.M. (CCH) 698; T.C.M. (RIA) 85058;
February 7, 1985.
Petitioner purchased 62 percent of the stock of a subsidiary corporation for $553,062. Petitioner made advances to the subsidary in the amount of $3,420,000. The subsidiary ceased operations. Petitioner claimed that its loss on the amount paid to purchase the stock of the subsidiary was ordinary under the Corn Products doctrine.…
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