Sauk Inv. Co. v. Commissioner
United States Board of Tax Appeals
Petitioner corporation was organized in 1927 by its four stockholders holders to take over a contract for the purchase of 1,120 shares of stock of another corporation, the purchase price being payable over a period of five years, which was entered into by one of its stockholders and assigned in parts to the other three stockholders. The stockholders were required to make substantial advances to petitioner to meet payments of interest and principal under the contract.
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Petitioner corporation was organized in 1927 by its four stockholders holders to take over a contract for the purchase of 1,120 shares of stock of another corporation, the purchase price being payable over a period of five years, which was entered into by one of its stockholders and assigned in parts to the other three stockholders. The stockholders were required to make substantial advances to petitioner to meet payments of interest and principal under the contract. While the petitioner had accumulated a book surplus at the end of 1930, it had no cash on hand and no assets which it could…
1Opinion of the Court
*736OPINION.
McMahon:
The question to be considered herein is whether the petitioner was formed in 1927 or availed of in 1930 for the purpose of preventing the imposition of the surtax upon its shareholders *737through the medium of permitting its gains and profits to accumulate instead of being divided or distributed within the meaning of section 104 (a) and (b) of the Revenue Act of 1928.1 Subsection (b) of that section provides that the fact that any corporation is a mere holding or investment company shall be prima facie evidence of a purpose of evading the surtax. However, this presumption is not…
2Cited by8 opinions
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- Gazette Pub. Co. v. SelfDistrict Court, E.D. Arkansas · 1952
- Bardahl Mfg. Corp. v. CommissionerUnited States Tax Court · 1965
- Henry Van Hummell, Inc. v. CommissionerUnited States Tax Court · 1964
- Casey v. CommissionerUnited States Tax Court · 1957
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