Commodores Point Terminal Corp. v. Commissioner
United States Tax Court
Petitioner acquired 58 per cent of the outstanding stock of another corporation in exchange for its own 3 per cent 15-year collateral trust bonds issued pursuant to the transaction. Petitioner in its return for the taxable year in question claimed deductions for state documentary stamps purchased in connection with the bond issue, for interest accrued on such bonds during the taxable year, and a dividends received credit on dividends paid on the acquired stock.
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Petitioner acquired 58 per cent of the outstanding stock of another corporation in exchange for its own 3 per cent 15-year collateral trust bonds issued pursuant to the transaction. Petitioner in its return for the taxable year in question claimed deductions for state documentary stamps purchased in connection with the bond issue, for interest accrued on such bonds during the taxable year, and a dividends received credit on dividends paid on the acquired stock. Held, the principal purpose of petitioner's acquisition of control of another corporation was not, within the meaning of section 129…
1Opinion of the Court
OPINION.
Arundell, Judge-.
The principal issue involved herein is whether respondent’s disallowance of certain deductions on the basis of section 129 of the Internal Revenue Code, was proper. Respondent’s contention is that petitioner’s principal purpose in its acquisition of control of the Piggly Wiggly Corporation was to avoid or evade Federal income or excess profits tax by securing the benefit of a deduction, credit, or allowance which it would not have otherwise enjoyed.
Section 129, enacted as law in the Revenue Act of 1943, so far as it is material in the present case is set out below.1
An…
2Cases cited1 opinion
- Higgins v. SmithSupreme Court of the United States · 1940
3Cited by49 opinions
- Coastal Oil Storage Company, and v. Commissioner of Internal Revenue, AndCourt of Appeals for the Fourth Circuit · 1957
- Hawaiian Trust Company Limited v. United StatesCourt of Appeals for the Ninth Circuit · 1961
- T. v. D. Co. v. CommissionerUnited States Tax Court · 1957
- Baton Rouge Supply Co. v. CommissionerUnited States Tax Court · 1961
- W A G E, Inc. v. CommissionerUnited States Tax Court · 1952
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