Atchison, T. & S. F. R. Co. v. Commissioner
United States Tax Court
Accrual Basis -- Interest From Subsidiary. -- Petitioner's wholly owned subsidiary, Gulf, was delinquent in payment of interest due from 1931 to 1941 to petitioner on loans. In 1942-1946 petitioner collected all Gulf's earnings and credited against arrearages. In 1931-1945 petitioner and subsidiaries filed consolidated returns; in 1946 and later years, separate returns.
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Accrual Basis -- Interest From Subsidiary. -- Petitioner's wholly owned subsidiary, Gulf, was delinquent in payment of interest due from 1931 to 1941 to petitioner on loans. In 1942-1946 petitioner collected all Gulf's earnings and credited against arrearages. In 1931-1945 petitioner and subsidiaries filed consolidated returns; in 1946 and later years, separate returns. In 1947 Gulf was insolvent and owed interest arrears from 1939. In 1947 petitioner decided to forego collection of arrearages and in the taxable years 1948 and 1949 accrued only current interest. Held, petitioner is not…
1Opinion of the Court
Tietjens, Judge:
The respondent determined deficiencies in income tax for the calendar years 1948 and 1949 in the respective amounts of $1,216,173.51 and $1,377,204.78. The sole issue remaining for decision is whether the respondent erred in determining that the petitioner should have accrued additional interest income from a subsidiary in those years.
The petitioner’s corporation income tax returns for 1948 and 1949 were filed with the collector of internal revenue at Wichita, Kansas.
FINDINGS OF FACT.
The stipulated facts are found accordingly and the exhibits to the stipulation are…
2Cases cited10 opinions
- Gregory v. HelveringSupreme Court of the United States · 1935
- North American Oil Consolidated v. BurnetSupreme Court of the United States · 1932
- Doyle v. Mitchell Brothers Co.Supreme Court of the United States · 1918
- Burnet v. LoganSupreme Court of the United States · 1931
- United States v. Cumberland Public Service Co.Supreme Court of the United States · 1950
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