Kern's Bakery of Virginia, Inc. v. Commissioner
United States Tax Court
Two unrelated families each owned 50 percent of the fair market value of corporations X, Y, and Z. Pursuant to the tax-free reorganization, corporations Y and Z were merged into corporation X, which had a substantial premerger loss carryover. The shareholders of corporation X received (as a result of owning stock in corporation X) 10 percent of the fair market value of the stock of the survivor corporation.
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Two unrelated families each owned 50 percent of the fair market value of corporations X, Y, and Z. Pursuant to the tax-free reorganization, corporations Y and Z were merged into corporation X, which had a substantial premerger loss carryover. The shareholders of corporation X received (as a result of owning stock in corporation X) 10 percent of the fair market value of the stock of the survivor corporation. Held: Corporations X, Y, and Z were not "owned substantially by the same persons in the same proportion" within the meaning of sec. 382(b)(3), and the loss carryover must be reduced…
1Opinion of the Court
Wilbur, Judge:
Respondent has determined deficiencies in petitioner’s Federal income tax for the taxable years 1968 to 1970, inclusive, in the amounts of $111,995.87, $84,692.83, and $389.20, respectively. Certain issues having been settled, the sole issue for decision is whether the petitioner’s post-reorganization net operating loss carryover is reduced under the provisions of section 382(b),1 thereby reducing petitioner’s allowable net operating loss deductions for 1968 and 1969 by $277,623.56 and $22,091.23, respectively. The resolution of this question depends on whether the transferor…
2Cases cited5 opinions
- Hanover Bank v. CommissionerSupreme Court of the United States · 1962
- Beatrice Levin v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1967
- Verito v. CommissionerUnited States Tax Court · 1965
- Commonwealth Container Corp. v. CommissionerUnited States Tax Court · 1967
- Commonwealth Container Corp. v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 1968
3Cited by4 opinions
- Stanley H. Brams v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1984
- Consolidated Blenders, Inc. v. United StatesDistrict Court, D. Nebraska · 1984
- Brams v. CommissionerUnited States Tax Court · 1983
- Kern's Bakery of Virginia, Inc. v. CommissionerUnited States Tax Court · 1977