Guarantee Constr. Co. v. Commissioner
United States Board of Tax Appeals
1. A corporation which in 1909 purchased stock of another corporation and immediately sold it at cost, on condition that if the stock should not prove to be a good investment it would return the purchase price and take back the stock, is not entitled upon the repurchase in 1918 of the stock of such corporation, which at that time was still in existence, to deduct as a loss under section 234(a) the amount refunded to the purchasers under the conditional sale. 2. Operating…
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1. A corporation which in 1909 purchased stock of another corporation and immediately sold it at cost, on condition that if the stock should not prove to be a good investment it would return the purchase price and take back the stock, is not entitled upon the repurchase in 1918 of the stock of such corporation, which at that time was still in existence, to deduct as a loss under section 234(a) the amount refunded to the purchasers under the conditional sale. 2. Operating deficits during the pre-war period may not be deducted from paid-in capital in determining the average pre-war invested…
1Opinion of the Court
*1147OPINION.
Littleton:
The taxpayer contends that the Commissioner erred: (1) In disallowing the deduction of $6,400 taken as a loss on the *1148repurchase of the stock of the Darley Engineering Co. in the year 1918; (2) in reducing its invested capital for the year 1919 by reason of the additional tax determined to be due for the year 1918; (3) in computing its war-profits credit for the years 1918 and 1919; and (4) in refusing to compute the profits tax for the years 1918 and 1919 under section 328 of the Revenue Act of 1918. The taxpayer alleged in its petition, as a reason for special assessment,…
2Cited by8 opinions
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- Bull v. CommissionerUnited States Board of Tax Appeals · 1927
- Excelsior Motor Mfg. & Supply Co. v. CommissionerUnited States Board of Tax Appeals · 1926
- Guantanamo Sugar Co. v. HelveringCourt of Appeals for the D.C. Circuit · 1936
- Guarantee Constr. Co. v. CommissionerUnited States Board of Tax Appeals · 1925
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