James McCutcheon & Co. v. Commissioner
United States Board of Tax Appeals
1. During the taxable year a subsidiary corporation, all of whose outstanding stock was owned by the parent corporation, sold at a profit to employees of the parent corporation certain shares of stock it owned in the parent.
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1. During the taxable year a subsidiary corporation, all of whose outstanding stock was owned by the parent corporation, sold at a profit to employees of the parent corporation certain shares of stock it owned in the parent. Held that the profit on the transaction constitutes taxable income of the subsidiary and should be included in the taxable consolidated income of the group. 2. In February 1928 certain stock was sold for a stipulated price with interest, payable on or before October 21, 1932. The contract of sale provided for the vendor holding the stock as collateral, receiving any…
1Opinion of the Court
OPINION.
Trammell :
This proceeding is for the redetermination of a deficiency in income tax of $713.28 for the fiscal year ended August 31, 1928. Matters presented for determination are (1) whether the difference between cost and selling price of certain shares of stock in the petitioner which were sold by petitioner’s subsidiary during the period of affiliation constituted taxable income and should be included as such in a consolidated return filed by the petitioner and its affiliates, and (2) in the event the foregoing issue is decided adversely to the petitioner, then whether the sale…
2Cases cited4 opinions
- Woolford Realty Co. v. RoseSupreme Court of the United States · 1932
- Prendergast v. CommissionerUnited States Board of Tax Appeals · 1931
- John Scowcroft & Sons Co. v. CommissionerUnited States Board of Tax Appeals · 1929
- Van Camp Packing Co. v. CommissionerUnited States Board of Tax Appeals · 1932
3Cited by5 opinions
- American Founders Corp. v. CommissionerUnited States Board of Tax Appeals · 1934
- Estate of Meredith v. CommissionerUnited States Tax Court · 1981
- Funsten v. CommissionerUnited States Board of Tax Appeals · 1941
- James McCutcheon & Co. v. CommissionerUnited States Board of Tax Appeals · 1934
- Security Co. v. CommissionerUnited States Board of Tax Appeals · 1935