Swiss Colony, Inc. v. Commissioner
United States Tax Court
In 1961, petitioner incorporated its research division into a separate corporation (Swiss Controls) which then issued its debenture bonds and stock warrants to two small business investment companies (SBIC's) in exchange for $ 300,000. In May 1962, the SBIC's investment was converted into cash plus 70,000 shares of Swiss Controls common stock.
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In 1961, petitioner incorporated its research division into a separate corporation (Swiss Controls) which then issued its debenture bonds and stock warrants to two small business investment companies (SBIC's) in exchange for $ 300,000. In May 1962, the SBIC's investment was converted into cash plus 70,000 shares of Swiss Controls common stock. Between May and August 1961, petitioner sold 110,000 shares of Swiss Controls stock it held to certain of its and Swiss Controls' officers and stockholders. Defaults in payments on these stock purchases occurred 1 year later, and on Dec. 26, 1962,…
1Opinion of the Court
OPINION
The question for determination herein relates to petitioner’s right to net operating loss deductions in 1963 and 1964 based on the net operating loss carryovers obtained on the liquidation of its subsidiary, Swiss Controls. Respondent’s attack on petitioner’s claimed deductions is twofold: (1) Petitioner did not succeed to Swiss Controls’ net operating loss carryovers because section 3813 was inapplicable to these loss carryovers since no valid section 332 liquidation existed due to the insolvency of Swiss Controls at the time its assets were transferred to petitioner; and (2)…
2Cases cited13 opinions
- Cohan v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1930
- American Pipe & Steel Corporation v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1957
- O'malley, Collector of Internal Revenue v. AmesCourt of Appeals for the Eighth Circuit · 1952
- Grunwald v. CommissionerUnited States Tax Court · 1986
- Colonial Fabrics, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1953
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3Cited by20 opinions
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- The Swiss Colony, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1970
- Daytona Beach Kennel Club, Inc. v. CommissionerUnited States Tax Court · 1978
- Hart Metal Products Corp. v. CommissionerUnited States Tax Court · 1969
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