Dallas Transfer & Terminal Warehouse Co. v. Commissioner
United States Board of Tax Appeals
In 1928 the petitioner transferred to its principal creditor certain real estate in consideration of the cancellation of its indebtedness, which indebtedness was in excess of the petitioner's net equity in the property. Held, the transfer of the real estate constituted a sale upon which the petitioner realized taxable profit in an amount equal to the difference between the depreciated cost of said real estate and the total amount of the canceled indebtedness.
1Opinion of the Court
*656OPINION.
TRAmmell :
The principal issue in this case is whether or not petitioner realized taxable income in 1928 from the transactions with its landlord, the Terminal Corporation, whereby the petitioner transferred the Alamo Street property to the Terminal Corporation and the latter canceled the balance of the petitioner’s indebtedness.
In 1928 the petitioner owed the Terminal Corporation $107,880.77 for unpaid rent and interest thereon. It was then insolvent and unable to pay this indebtedness. An agreement was reached by which the petitioner was enabled to continue its business and the…
2Cases cited2 opinions
- United States v. Kirby Lumber CoSupreme Court of the United States · 1931
- Bowers v. Kerbaugh-Empire Co.Supreme Court of the United States · 1926
3Cited by18 opinions
- Danenberg v. CommissionerUnited States Tax Court · 1979
- Merkel v. CommissionerUnited States Tax Court · 1997
- Yale Ave. Corp. v. CommissionerUnited States Tax Court · 1972
- Carlson v. CommissionerUnited States Tax Court · 2001
- Gehl v. CommissionerUnited States Tax Court · 1994
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