Capital Sales, Inc. v. Commissioner
United States Tax Court
P corporation's principal operating asset was a franchise. The franchisor terminated P corporation's franchise and granted the franchise to S corporation, which was controlled by substantially the same people who controlled P corporation. Simultaneously therewith, P corporation sold its remaining operating assets to S corporation at book value and distributed its liquid assets to its shareholders in liquidation.
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P corporation's principal operating asset was a franchise. The franchisor terminated P corporation's franchise and granted the franchise to S corporation, which was controlled by substantially the same people who controlled P corporation. Simultaneously therewith, P corporation sold its remaining operating assets to S corporation at book value and distributed its liquid assets to its shareholders in liquidation. Held: These transactions do not constitute a reorganization within the meaning of sec. 368(a)(1)(D), I.R.C. 1954, because there was no transfer by P corporation of substantially all…
1Opinion of the Court
Capital Sales, Inc., 1 Petitioner v. Commissioner of Internal Revenue, Respondent
Capital Sales, Inc. v. Commissioner
Docket Nos. 829-77, 830-77, 831-77, 832-77
United States Tax Court
71 T.C. 416; 1978 U.S. Tax Ct. LEXIS 4;
December 27, 1978, Filed
Decisions will be entered under Rule 155.
P corporation's principal operating asset was a franchise. The franchisor terminated P corporation's franchise and granted the franchise to S corporation, which was controlled by substantially the same people who controlled P corporation. Simultaneously therewith, P corporation sold its remaining operating assets…
Also in this document: Dissent.
2Cases cited30 opinions
- Jack E. Golsen and Sylvia H. Golsen v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1971
- Helvering v. Alabama Asphaltic Limestone Co.Supreme Court of the United States · 1942
- J. E. Davant and Kathryn Davant v. Commissioner of Internal Revenue, Commissioner of Internal Revenue v. J. E. Davant and Kathryn DavantCourt of Appeals for the Fifth Circuit · 1966
- American Bantam Car Co. v. CommissionerUnited States Tax Court · 1948
- Lewis v. Commissioner of Internal RevenueCourt of Appeals for the First Circuit · 1949
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