Cromwell Corp. v. Commissioner
United States Tax Court
Four individuals formed Cromwell, which acquired all of the stock of Cornwell, an operating company which owned all of the stock of Kennedy. In order to finance part of the purchase price, Cromwell obtained a temporary $ 400,000 bank loan. Immediately after the purchase, Cornwell obtained a $ 400,000 loan from the bank, and paid a $ 400,000 dividend to Cromwell, which used the proceeds to repay its earlier loan.
Read the full summary
Four individuals formed Cromwell, which acquired all of the stock of Cornwell, an operating company which owned all of the stock of Kennedy. In order to finance part of the purchase price, Cromwell obtained a temporary $ 400,000 bank loan. Immediately after the purchase, Cornwell obtained a $ 400,000 loan from the bank, and paid a $ 400,000 dividend to Cromwell, which used the proceeds to repay its earlier loan. The corporations filed a consolidated return in which the $ 400,000 dividend was eliminated. Held, respondent erred in determining that under section 269, I.R.C. 1954, the…
1Opinion of the Court
TraiN, Judge:
Respondent determined deficiencies in income tax for the fiscal year ending September 30, 1957, in the following amounts:
Docket No. Petitioner Amount
93889 Cromwell Corp.. — .—..--- $270,888.81
93890 The Cornwell Quality Tools Co. 61,449.00
93891 The Cornwell Quality Tools Co., Transferee of Kennedy Service Tools Co.1- 4,732.17
Petitioners filed a consolidated return for the entire fiscal year ended September 30, 1957, with the district director of internal revenue, Chicago, Ill., although they claim to have been affiliated only for the period from August 1 to September 30, 1957. The…
2Cases cited23 opinions
- Gregory v. HelveringSupreme Court of the United States · 1935
- Commissioner v. TowerSupreme Court of the United States · 1946
- United States v. Cumberland Public Service Co.Supreme Court of the United States · 1950
- United States v. IshamSupreme Court of the United States · 1873
- Joseph R. Holsey and Eleanor T. Holsey v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 1958
18 more not listed; retrieve them via the Exa API.
3Cited by9 opinions
- Supreme Investment Corporation v. United StatesCourt of Appeals for the Fifth Circuit · 1972
- Walter Apschnikat v. United StatesCourt of Appeals for the Sixth Circuit · 1970
- Cherry v. United StatesDistrict Court, C.D. California · 1967
- Rocco, Inc. v. CommissionerUnited States Tax Court · 1979
- Wells Fargo & Co. v. United StatesDistrict Court, D. Minnesota · 2015
4 more not listed; retrieve them via the Exa API.