Commercial Sec. Bank v. Commissioner
United States Tax Court
Pursuant to a plan of complete liquidation under sec. 337, I.R.C. 1954, O sold all of its assets, including receivables, to petitioner in exchange for cash and assumption of O's accrued liabilities. O was a cash basis taxpayer, and the transferred accrued liabilities were of a character which would have been deductible by O when paid. Held, O must include in its gross income the amount of the transferred "accrued interest receivables."
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Pursuant to a plan of complete liquidation under sec. 337, I.R.C. 1954, O sold all of its assets, including receivables, to petitioner in exchange for cash and assumption of O's accrued liabilities. O was a cash basis taxpayer, and the transferred accrued liabilities were of a character which would have been deductible by O when paid. Held, O must include in its gross income the amount of the transferred "accrued interest receivables." Held, further, the diminution in sales price paid to O on account of the transferred "accrued business liabilities" is equivalent to a payment by O, and…
1Opinion of the Court
OPINION
Tannenwald, Chief Judge:
Respondent determined deficiencies in the Federal income taxes of Orem State Bank (Orem) of $2,793.20 and $86,510.06 for the taxable years ending December 31, 1973, and June 14, 1974. Petitioner has accepted liability for all deficiencies adjudged against Orem as transferee of Orem’s assets and liabilities. See sec. 6901 et seq.1 Because of concessions by petitioner, the issues remaining concern the proper tax treatment of accrued but unpaid deductible expenses and accrued but unreceived items of ordinary income in the short taxable year of Orem’s complete…
2Cases cited22 opinions
- Crane v. CommissionerSupreme Court of the United States · 1947
- Commissioner of Internal Revenue v. CarterCourt of Appeals for the Second Circuit · 1948
- Jud Plumbing & Heating, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1946
- Standard Paving Co. v. Commissioner of Internal Revenue. Standard Paving Co. v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1951
- Carter v. CommissionerUnited States Tax Court · 1947
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3Cited by3 opinions
- Texas Instruments v. CommissionerUnited States Tax Court · 1992
- Commercial Sec. Bank v. CommissionerUnited States Tax Court · 1981
- Zermeno v. CommissionerUnited States Tax Court · 1991