Peerless Inv. Co. v. Commissioner
United States Tax Court
In 1950, the petitioner purchased all the stock of Packing, paying approximately $ 200,000 in excess of the fair market value of the underlying assets. In 1963, Packing was merged into the petitioner, and at that time, Packing had no basis for Federal income tax purposes for goodwill. In 1966, the petitioner sold its assets and deducted a loss for goodwill equal to the amount that it paid in excess of the fair market value of the assets.
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In 1950, the petitioner purchased all the stock of Packing, paying approximately $ 200,000 in excess of the fair market value of the underlying assets. In 1963, Packing was merged into the petitioner, and at that time, Packing had no basis for Federal income tax purposes for goodwill. In 1966, the petitioner sold its assets and deducted a loss for goodwill equal to the amount that it paid in excess of the fair market value of the assets. Held, in 1950, the petitioner purchased stock; it did not purchase goodwill and stock.
1Opinion of the Court
OPINION
Simpson, Judge:
The respondent determined a deficiency of $106,-489.51 in the petitioner’s 1965 Federal income tax. The issue to be decided is whether the petitioner acquired an item of “goodwill” when it purchased the stock of a corporation and paid an amount in excess of the fair market value of the underlying assests.
All of the facts were stipulated, and those facts are so found.
The petitioner, Peerless Investment Co., is a corporation, incorporated in 1940 under the laws of the State of Illinois, which had its principal office in Chicago, Ill., at the time the petition was filed in…
2Cases cited7 opinions
- Kimbell-Diamond Milling Co. v. Comm'rUnited States Tax Court · 1950
- Kimbell-Diamond Milling Co. v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1951
- B. F. Goodrich Co. v. CommissionerUnited States Tax Court · 1943
- Webster Investors, Inc. (Successor by Merger to Webster Investment Company, Inc) v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1961
- Howard Constr., Inc. v. CommissionerUnited States Tax Court · 1964
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