Adams Bros. Co. v. Commissioner
United States Tax Court
Petitioner, a wholly owned subsidiary, received advances from its parent. The parent paid purchase invoices and petitioner deposited sales proceeds to parent's account. The debits and credits were recorded in open accounts. Periodically, petitioner issued its note for the balance due parent, and canceled the last prior note. The notes were negotiable but were not negotiated.
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Petitioner, a wholly owned subsidiary, received advances from its parent. The parent paid purchase invoices and petitioner deposited sales proceeds to parent's account. The debits and credits were recorded in open accounts. Periodically, petitioner issued its note for the balance due parent, and canceled the last prior note. The notes were negotiable but were not negotiated. Held, the indebtedness was not "evidenced" by a note and was not borrowed capital within the meaning of section 719 (a) (1), Internal Revenue Code.
1Opinion of the Court
Adams Brothers Company, Petitioner, v. Commissioner of Internal Revenue, Respondent
Adams Bros. Co. v. Commissioner
Docket No. 41519
United States Tax Court
22 T.C. 395; 1954 U.S. Tax Ct. LEXIS 197;
May 26, 1954, Filed. May 26, 1954, Filed
Decision will be entered for the respondent.
Petitioner, a wholly owned subsidiary, received advances from its parent. The parent paid purchase invoices and petitioner deposited sales proceeds to parent's account. The debits and credits were recorded in open accounts. Periodically, petitioner issued its note for the balance due parent, and canceled the last prior…
2Cases cited3 opinions
- Flint Nortown Theatre Co. v. CommissionerUnited States Tax Court · 1945
- Kellogg Com. Co. v. CommissionerUnited States Tax Court · 1949
- Adams Bros. Co. v. CommissionerUnited States Tax Court · 1954