Carnation Co. v. Commissioner
United States Tax Court
Petitioner and an unrelated insurance company entered into an "insurance" agreement. Simultaneously, the unrelated insurance company "reinsured" 90 percent of its risk under that agreement with petitioner's wholly owned Bermudan subsidiary. However, before the unrelated insurance company would participate in the "reinsurance" agreement, petitioner had to give its wholly owned Bermudan subsidiary access upon demand to an additional $ 2,880,000 in capital contributions.
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Petitioner and an unrelated insurance company entered into an "insurance" agreement. Simultaneously, the unrelated insurance company "reinsured" 90 percent of its risk under that agreement with petitioner's wholly owned Bermudan subsidiary. However, before the unrelated insurance company would participate in the "reinsurance" agreement, petitioner had to give its wholly owned Bermudan subsidiary access upon demand to an additional $ 2,880,000 in capital contributions. Without regard to the demand agreement, petitioner's capital contribution to its wholly owned Bermudan subsidiary was $…
1Opinion of the Court
OPINION
Goffe, Judge:
The Commissioner determined a deficiency in the Federal income tax of petitioner for the taxable year 1972 in the amount of $823,632. This matter is before the Court on the parties’ motions for summary judgment which were filed pursuant to Rule 121, Tax Court Rules of Practice and Procedure. Due to concessions, three issues remain for our decision:(1) Whether petitioner is entitled to deduct as an ordinary and necessary business expense the entire amount paid to an unrelated insurance company as insurance premiums if such unrelated company thereafter reinsures 90 percent…
2Cases cited17 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Moline Properties, Inc. v. CommissionerSupreme Court of the United States · 1943
- Helvering v. Le GierseSupreme Court of the United States · 1941
- Securities & Exchange Commission v. Variable Annuity Life InsuranceSupreme Court of the United States · 1959
- Nat Harrison Assoc., Inc. v. CommissionerUnited States Tax Court · 1964
12 more not listed; retrieve them via the Exa API.
3Cited by48 opinions
- Carnation Company v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1981
- Clougherty Packing Company v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1987
- Gulf Oil Corporation, in No. 89-2049 v. Commissioner of Internal Revenue. Commissioner of Internal Revenue, in No. 89-2050 v. Gulf Oil CorporationCourt of Appeals for the Third Circuit · 1990
- Humana Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1989
- Clougherty Packing Co. v. CommissionerUnited States Tax Court · 1985
43 more not listed; retrieve them via the Exa API.