France Co. v. Commissioner
United States Board of Tax Appeals
A corporation, owning by cash purchase all the shares of its subsidiary, received all the subsidiary's assets and assumed all its liabilities pursuant to an agreement whereby it surrendered the shares for cancellation by the subsidiary. The difference between the cost of the shares and the net value of the subsidiary's assets when received, held to constitute a taxable gain to the corporation from a distribution in liquidation.
1Opinion of the Court
*664OPINION.
SteRNHAGEn :
This was so obviously a distribution to petitioner in complete liquidation of all its shares in the Bascom Co. that it deserves but brief consideration. The petitioner labors an argument (1) that the transaction was a purchase; (2) that, if a distribution, it was essentially the equivalent of an ordinary dividend; (3) that it was a statutory reorganization, and thus relieved from tax; (4) that the corporations were affiliated and filed a consolidated return; and (5) that upon a consolidated return the transaction was an intercompany transaction upon which no gain may be…
2Cases cited2 opinions
- Pinellas Ice & Cold Storage Co. v. CommissionerSupreme Court of the United States · 1933
- Burnet v. Aluminum Goods Manufacturing Co.Supreme Court of the United States · 1933
3Cited by2 opinions
- Trenton Oil Co. v. United StatesDistrict Court, E.D. Michigan · 1939
- France Co. v. CommissionerUnited States Board of Tax Appeals · 1934