Tracinda Corp. v. Commissioner
United States Tax Court
Ps (TBS and Tracinda) and others engaged in a series of complex commercial transactions that closed simultaneously. TBS acquired a publicly held and traded company (MGM) by way of a reverse triangular subsidiary merger. At the same time as the acquisition by merger, MGM transferred all the shares in its wholly owned subsidiary (UA) to one of its former shareholders, Tracinda.
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Ps (TBS and Tracinda) and others engaged in a series of complex commercial transactions that closed simultaneously. TBS acquired a publicly held and traded company (MGM) by way of a reverse triangular subsidiary merger. At the same time as the acquisition by merger, MGM transferred all the shares in its wholly owned subsidiary (UA) to one of its former shareholders, Tracinda. Tracinda then sold some of the UA shares to former shareholders of MGM pursuant to a prospectus and subscription agreement, which was contemplated in the initial agreement. The consideration received by MGM for the UA…
1Opinion of the Court
OPINION
Ruwe, Judge:
Respondent determined a deficiency in Tracinda Corp.’s (Tracinda) Federal income tax for the taxable year ending January 31, 1991, in the amount of $54,763,119 and an accuracy-related penalty under section 6662(d)1 in the amount of $10,952,616. Respondent determined deficiencies in Turner Broadcasting System, Inc.’s (TBS) Federal income tax for the taxable year ending December 31, 1991, in the amount of $21,538,821 and for the taxable year ending December 31, 1992, in the amount of $49,050,854. Tracinda’s deficiency results from disallowance of a basis adjustment arising…
2Cases cited29 opinions
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