Clark Thread Co. v. Commissioner
United States Board of Tax Appeals
1. Corporations A and B and certain individual stockholders of B in 1897 entered into a contract by which B appointed A its sole selling agent and agreed to sell to A its entire manufactured output at cost, plus $225,000 per year, for a period of 45 years from July 1, 1896. A majority of the capital stock of B was owned by shareholders and officers of another corporation which was the sole stockholder of A. Thereafter A acquired the capital stock of B from time to time until…
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1. Corporations A and B and certain individual stockholders of B in 1897 entered into a contract by which B appointed A its sole selling agent and agreed to sell to A its entire manufactured output at cost, plus $225,000 per year, for a period of 45 years from July 1, 1896. A majority of the capital stock of B was owned by shareholders and officers of another corporation which was the sole stockholder of A. Thereafter A acquired the capital stock of B from time to time until December 3, 1897, when A became the sole stockholder of B. A was dissolved in 1917, and the contract thereby…
1Opinion of the Court
*1141OPINION.
Issue (I) — Amortisation of Contract of 1897.
Trammell :
The petitioners contend that the Clark Thread Co. is entitled to a deduction from gross income for each of the taxable years 1923 and 1921 on account of amortization of the contract entered into by and between George A. Clark & Brother (Inc.) and the Clark Thread Co. (and certain of the latter’s stockholders) in 1891 in the circumstances detailed under this issue in our findings of fact.
The petitioners claim that the contract constituted a valuable capital asset in the hands of George A. Clark & Brother (Inc.) from the date of its…
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