New England Foundry Corp. v. Commissioner
United States Tax Court
Held, that petitioner has established by a clear preponderance of the evidence that the transfer of property made to it by another corporation shortly after petitioner's formation was not made with a major purpose of obtaining the surtax exemption provided for in section 11(c) of the Internal Revenue Code of 1954; and accordingly that respondent erred in denying to the petitioner, pursuant to section 1551 of the 1954 Code, the benefit of such exemption for its taxable years…
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Held, that petitioner has established by a clear preponderance of the evidence that the transfer of property made to it by another corporation shortly after petitioner's formation was not made with a major purpose of obtaining the surtax exemption provided for in section 11(c) of the Internal Revenue Code of 1954; and accordingly that respondent erred in denying to the petitioner, pursuant to section 1551 of the 1954 Code, the benefit of such exemption for its taxable years ending July 3, 1959, and July 2, 1960.
1Opinion of the Court
OPINION
Turner, Judge:
Section 1551 of the 1954 Code, which is the governing statute in this case, provided as follows during the years in question:
SEC. 1551. DISALLOWANCE OE SURTAX EXEMPTION AND ACCUMULATED EARNINGS CREDIT.
If any corporation transfers, on or after January 1, 1951, all or part of its property (other than money) to another corporation which was created for the purpose of acquiring such property or which was not actively engaged in business at the time of such acquisition, and if after such transfer the transferor corporation or its stockholders, or both, are in control of such…
2Cases cited3 opinions
- Bush Hog Mfg. Co. v. CommissionerUnited States Tax Court · 1964
- Hiawatha Home Builders, Inc. v. CommissionerUnited States Tax Court · 1961
- Cronstroms Mfg., Inc. v. CommissionerUnited States Tax Court · 1961
3Cited by5 opinions
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- New England Foundry Corp. v. CommissionerUnited States Tax Court · 1965