McCrory Corporation v. United States

ROBERT J. WARD, District Judge:

This appeal presents the narrow question whether for federal income tax purposes an acquiring corporation may deduct the expenses incident to its acquisition of a corporate subsidiary by a tax-free, stock-for-stock exchange pursuant to I.R.C. §§ 361 and 368, in the later tax years during which the acquiring corpbration liquidates the subsidiary and disposes of the line or lines of business acquired in the earlier transaction. Reasoning in this case that these expenses were incurred by appellant acquiring corporation in the creation of a new corporate entity…