Madison Fund, Inc. v. Commissioner
United States Tax Court
Held: That the net amount received by petitioner in 1947 in settlement of two stockholders' derivative suits against the Pennsylvania Railroad Co., for recovery of losses resulting from breach of a fiduciary relationship in causing improper investments of petitioner's funds, is properly allocable among the investments complained of in the suits, and that the amount so allocated to investments sold in the years 1952 through 1960 serves to reduce the bases thereof for the…
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Held: That the net amount received by petitioner in 1947 in settlement of two stockholders' derivative suits against the Pennsylvania Railroad Co., for recovery of losses resulting from breach of a fiduciary relationship in causing improper investments of petitioner's funds, is properly allocable among the investments complained of in the suits, and that the amount so allocated to investments sold in the years 1952 through 1960 serves to reduce the bases thereof for the purpose of determining gain or loss upon the sales in those years. The method of allocation determined.
1Opinion of the Court
AtkiNS, Judge:
The respondent determined deficiencies in income tax as follows:
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As the result of certain agreements and concessions of the parties, the only issue remaining for decision is whether in computing the gain or loss upon the sale by the petitioner of certain securities in the years 1952, 1953, 1954, 1955, 1958, and 1960 the basis of such securities should be reduced on account of the receipt by petitioner in 1947 from the Pennsylvania Railroad Co. of a net amount in settlement of certain stockholders’ derivative suits, and, if so, the portion of such net amount which is…
2Cases cited14 opinions
- Burnet v. Sanford & Brooks Co.Supreme Court of the United States · 1931
- Helvering v. Safe Deposit & Trust Co. of BaltimoreSupreme Court of the United States · 1942
- Overfield v. Pennroad CorporationCourt of Appeals for the Third Circuit · 1944
- United Mercantile Agencies, Inc. v. CommissionerUnited States Tax Court · 1955
- F. W. Drybrough v. Commissioner of Internal Revenue, L. N. Simpson v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1956
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3Cited by4 opinions
- Madison Fund, Inc. (Formerly the Pennroad Corporation) v. Commissioner of Internal Revenue (Two Cases)Court of Appeals for the Third Circuit · 1966
- Elward v. United StatesDistrict Court, N.D. Illinois · 1976
- Madison Fund, Inc. (Formerly the Pennroad Corporation) v. Commissioner of Internal Revenue (Two Cases)Court of Appeals for the Third Circuit · 1966
- Madison Fund, Inc. v. CommissionerUnited States Tax Court · 1964