Crean Bros., Inc. v. Commissioner
United States Tax Court
1. Excess Profits Tax -- Equity Invested Capital -- Property Contributed -- Basis -- Section 718 (a) (2). -- The cancellation of indebtedness can not increase equity invested capital under section 718 (a) (2) since the debtor has no basis for loss on a debt after it has been canceled. 2. Id. -- The cancellation of a debt by a non-stockholder of an insolvent debtor, which improves the financial statement of the debtor so that it no longer shows insolvency but merely impaired…
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1. Excess Profits Tax -- Equity Invested Capital -- Property Contributed -- Basis -- Section 718 (a) (2). -- The cancellation of indebtedness can not increase equity invested capital under section 718 (a) (2) since the debtor has no basis for loss on a debt after it has been canceled. 2. Id. -- The cancellation of a debt by a non-stockholder of an insolvent debtor, which improves the financial statement of the debtor so that it no longer shows insolvency but merely impaired capital, does not increase equity invested capital.
1Opinion of the Court
Crean Brothers, Inc., Petitioner, v. Commissioner of Internal Revenue, Respondent
Crean Bros., Inc. v. Commissioner
Docket No. 19731
United States Tax Court
15 T.C. 889; 1950 U.S. Tax Ct. LEXIS 18;
December 18, 1950, Promulgated
Decision will be entered for the respondent.
1. Excess Profits Tax -- Equity Invested Capital -- Property Contributed -- Basis -- Section 718 (a) (2). -- The cancellation of indebtedness can not increase equity invested capital under section 718 (a) (2) since the debtor has no basis for loss on a debt after it has been canceled.
2. Id. -- The cancellation of a debt by a…
Also in this document: Dissent.
2Cases cited8 opinions
- Helvering v. American Dental Co.Supreme Court of the United States · 1943
- Brown Shoe Co. v. CommissionerSupreme Court of the United States · 1950
- Commissioner of Internal Revenue v. Auto Strop Safety Razor Co., Inc.Court of Appeals for the Second Circuit · 1934
- West Constr. Co. v. CommissionerUnited States Tax Court · 1946
- United States v. Oregon-Washington R. & Nav. Co.Court of Appeals for the Second Circuit · 1918
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