Mountain Water Co. v. Commissioner
United States Tax Court
Petitioner was a mutual water company exempt from tax under section 501(c)(12), I.R.C. 1954, and its predecessor sections under the 1939 Code, prior to 1955. The County Water District, a political subdivision of the State of California, instituted condemnation proceedings to acquire all of petitioner's operating assets.
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Petitioner was a mutual water company exempt from tax under section 501(c)(12), I.R.C. 1954, and its predecessor sections under the 1939 Code, prior to 1955. The County Water District, a political subdivision of the State of California, instituted condemnation proceedings to acquire all of petitioner's operating assets. The condemnation award was accepted by petitioner's directors on April 25, 1955, and petitioner's operating assets were immediately transferred to the county water district. The sale resulted in a large capital gain to petitioner. Petitioner was dissolved and by April 25,…
1Opinion of the Court
OPINION.
Deennen, Judge:
Respondent determined a deficiency in petitioner’s income tax for the calendar year 1955 in the amount of $45,457.36. The issues for decision are: (1) Whether gain from the involuntary sale of all of petitioner’s assets is includible in “income” for the purpose of applying the limitation in section 501(c) (12), I.R.C. 1954, under which petitioner was otherwise qualified for exemption from taxation; and (2) if petitioner was not exempt from taxation, whether petitioner (a) adopted a plan of complete liquidation on or before the date of the sale of its operating assets,…
2Cases cited12 opinions
- Crooks v. HarrelsonSupreme Court of the United States · 1930
- Meyer's Estate v. Commissioner of Internal Revenue. (Three Cases)Court of Appeals for the Fifth Circuit · 1952
- Kennemer v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1938
- Meyer v. CommissionerUnited States Tax Court · 1950
- Burnside Veneer Co. v. Commissioner of Internal Rev.Court of Appeals for the Sixth Circuit · 1948
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