Wortham MacHinery Company, a Wyoming Corporation v. The United States of America

BREITENSTEIN, Circuit Judge.

This is a suit for refund of federal income taxes. The problems arose out of the transfer of assets by one corporation to another. The main issues are (1) the right of the transferee to deduct transferor’s net operating loss, (2) the right of the transferee to a bad debt deduction for advances to the transferor, and (3) the taxability as constructive dividends of payments made by transferee to its controlling stockholders. Except for specific items conceded by the government, the district court after trial without a jury held for the government, see Wortham…