Crow-Burlingame Co. v. Commissioner
United States Tax Court
Held: Stock which was sold to the employees of subsidiary corporations subject to a repurchase option was "excluded stock" within the meaning of sec. 1563(c)(2)(A)(iii), I.R.C. 1954. The repurchase option favored the parent corporation indirectly even though a third corporation, owned principally by employees of the parent and the subsidiaries, was formally designated as the optionee.
1Opinion of the Court
OPINION
Section 1561(a)(1)4 provides that if a group of corporations constitutes a “controlled group of corporations” on a December 31, the component members of the group for the taxable year in which that date falls are entitled to a single surtax exemption, divided among them equally or in accordance with an approved apportionment plan. Under section 1562,5 however, a “controlled group of corporations” may elect each to enjoy a $25,000 surtax exemption, but a penalty is extracted in the form of an increase in the surtax rate in return for this privilege. For prior years, petitioners made…
2Cases cited2 opinions
- Barton Naphtha Co. v. CommissionerUnited States Tax Court · 1971
- Mid-America Industries, Inc., a Delaware Corporation v. United StatesCourt of Appeals for the Eighth Circuit · 1973
3Cited by2 opinions
- Crow-Burlingame Co. v. CommissionerUnited States Tax Court · 1976
- Wilson Plywood & Door, Inc. v. CommissionerUnited States Tax Court · 1980