Frelmort Realty Corp. v. Commissioner
United States Board of Tax Appeals
1. Where petitioner owned but 80 percent of the stock of a subsidiary, affiliation is denied under the Revenue Acts of 1924 and 1926. 2. Whether or not a transaction constituted a liquidating dividend and was taxable as such is to be determined in the light of the Federal taxing act rather than by the consequences attaching to the transaction under a state statute.
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1. Where petitioner owned but 80 percent of the stock of a subsidiary, affiliation is denied under the Revenue Acts of 1924 and 1926. 2. Whether or not a transaction constituted a liquidating dividend and was taxable as such is to be determined in the light of the Federal taxing act rather than by the consequences attaching to the transaction under a state statute. Held, that the petitioner acquired the assets of its subsidiary in liquidation of the latter and the property so received was a liquidating dividend.
1Opinion of the Court
*185OPINION.
Aktjndell :
The question of affiliation during 1924 and until Roeser and DeMallie surrendered their stock in 1925 requires but little discussion. Section 240 (c) of both the Revenue Acts of 1924 and 1926 provides for affiliation “ if one corporation owns at least 95 per centum of the voting stock of the other.” Here the petitioner owned but 80 percent, which clearly does not bring it within the statute. It has been held that affiliation may exist where the holder of a minority interest of more than 5 percent is but the nominee of the parent and the parent company is in fact the “ real…
2Cases cited13 opinions
- Burnet v. HarmelSupreme Court of the United States · 1932
- Weiss v. WeinerSupreme Court of the United States · 1929
- Burk-Waggoner Oil Assn. v. HopkinsSupreme Court of the United States · 1925
- United States v. ChildsSupreme Court of the United States · 1924
- Nielsen v. JohnsonSupreme Court of the United States · 1929
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3Cited by15 opinions
- J. C. Penney Co. v. CommissionerUnited States Tax Court · 1962
- Herbert A. Nieman & Co. v. CommissionerUnited States Tax Court · 1959
- Miami Nat'l Bank v. CommissionerUnited States Tax Court · 1977
- Rogan v. Starr Piano Co., Pacific DivisionCourt of Appeals for the Ninth Circuit · 1943
- Central Nat'l Bank v. CommissionerUnited States Board of Tax Appeals · 1933
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