American Bantam Car Co. v. Commissioner
United States Tax Court
On June 2, 1936, petitioner was incorporated and on June 3, 1936, acquired capital assets subject to $ 219,099.83 of liabilities plus $ 500 in cash in exchange for 300,000 shares of its common stock.
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On June 2, 1936, petitioner was incorporated and on June 3, 1936, acquired capital assets subject to $ 219,099.83 of liabilities plus $ 500 in cash in exchange for 300,000 shares of its common stock. Held, on the facts presented, that this was a nontaxable exchange under section 112 (b) (5) of the Revenue Act of 1936 and the proper basis for depreciation of those capital assets for the taxable years 1942 and 1943 is their basis in the hands of the transferors, as provided in section 113 (a) (8) of the code.
1Opinion of the Court
OPINION.
Hill, Judge:
This case requires the determination of the proper basis for the Austin assets acquired by petitioner on June 3, 1936, in exchange for stock. We must decide whether under the facts here section 113 (a) (8) (A) of the Internal Revenue Code requires petitioner, in computing deductions for depreciation, to take as the basis of the assets so acquired the basis thereof in the hands of the transferors. This section is applicable if the exchange by which petitioner received the Austin assets was one in which gain or loss is not recognized under the provisions of section 112 (b)…
2Cited by108 opinions
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- Palmer v. CommissionerUnited States Tax Court · 1974
- Crown v. CommissionerUnited States Tax Court · 1981
- Cal-Maine Foods, Inc. v. CommissionerUnited States Tax Court · 1989
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