McKay Products Corp. v. Commissioner
United States Tax Court
Valley, a corporation formed to promote industrial interests of community, agreed to give Belle (petitioner's predecessor), a manufacturing company, land and factory buildings if it would move to Sayre, Pennsylvania. Real estate donated was to be paid for out of cash subscriptions and proceeds of pledges given to Valley by individuals employed by Belle. Belle moved to Sayre, and Valley transferred the real estate to it, subject to a mortgage which was not assumed by Belle.
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Valley, a corporation formed to promote industrial interests of community, agreed to give Belle (petitioner's predecessor), a manufacturing company, land and factory buildings if it would move to Sayre, Pennsylvania. Real estate donated was to be paid for out of cash subscriptions and proceeds of pledges given to Valley by individuals employed by Belle. Belle moved to Sayre, and Valley transferred the real estate to it, subject to a mortgage which was not assumed by Belle. Money was not realized by Valley fast enough on pledges to enable it to meet its obligations, and it asked for and…
1Opinion of the Court
OPINION.
Harlan, Judge:
The respondent’s first contention is that the petitioner is not entitled to a bad debt deduction for the fiscal year ended July 31, 1940, of the amount of $130,607.42 because (1) the disbursement by Belle of this amount was not made for the purpose of creating a debt and did not give rise to a debt from Valley to Belle, and (2) the petitioner has failed to prove that the alleged debt became worthless in the fiscal year ended July 31,1940.
The respondent argues that the advances were either investments by Belle in real estate made for the purpose of protecting its equity…
2Cases cited4 opinions
- Helvering v. American Dental Co.Supreme Court of the United States · 1943
- Edwards v. Cuba RailroadSupreme Court of the United States · 1925
- Liberty Mirror Works v. CommissionerUnited States Tax Court · 1944
- Bigelow v. BigelowSupreme Judicial Court of Maine · 1901
3Cited by16 opinions
- Brown Shoe Co. v. CommissionerSupreme Court of the United States · 1950
- Foresun, Inc. v. CommissionerUnited States Tax Court · 1964
- Drachman v. CommissionerUnited States Tax Court · 1954
- Brown Shoe Co. v. CommissionerUnited States Tax Court · 1948
- Commissioner v. Brown Shoe Co.Court of Appeals for the Eighth Circuit · 1949
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