International State Bank v. Commissioner
United States Tax Court
Petitioner acquired 100 percent of the stock of S from I and immediately liquidated S. Held, petitioner did not acquire the S stock by purchase within the meaning of sec. 334(b)(3), I.R.C. 1954, and is therefore not entitled to a stepped-up basis under sec. 334(b)(2) in the assets it received upon liquidation of S. Held, further, in a liquidation of a subsidiary which meets the requirements of sec. 332, the basis of the assets thus received is determined under sec. 334(b)(1)…
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Petitioner acquired 100 percent of the stock of S from I and immediately liquidated S. Held, petitioner did not acquire the S stock by purchase within the meaning of sec. 334(b)(3), I.R.C. 1954, and is therefore not entitled to a stepped-up basis under sec. 334(b)(2) in the assets it received upon liquidation of S. Held, further, in a liquidation of a subsidiary which meets the requirements of sec. 332, the basis of the assets thus received is determined under sec. 334(b)(1) unless the exception provided by sec. 334(b)(2) applies.
1Opinion of the Court
Fay, Judge:
Respondent determined the following deficiencies in petitioner’s Federal income taxes:
Year Deficiency
1970 .$2,832.81
1971 . 8,496.20
Due to concessions, the sole issue remaining is whether the basis of certain assets received by petitioner upon the liquidation of its wholly owned subsidiary should be computed by reference to the subsidiary’s basis in such assets pursuant to section 334(b)(1),1 or by reference to petitioner’s adjusted basis in the stock of the subsidiary.
FINDINGS OF FACT
Most of the facts in this case have been stipulated and are so found.
Petitioner International State…
2Cases cited15 opinions
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