Kewanee Oil Co. v. Commissioner
United States Tax Court
In 1965 T Corp., a domestic corporation engaged exclusively in the production of oil and gas in Canada, sold in a single transaction substantially all of its oil- and gas-producing property, all of its associated production equipment, and 70 percent of the net undeveloped acreage it then held. Its only gross income during the 3-year period immediately preceding the close of its taxable year in 1965 consisted of the gain realized by reason of that sale.
Read the full summary
In 1965 T Corp., a domestic corporation engaged exclusively in the production of oil and gas in Canada, sold in a single transaction substantially all of its oil- and gas-producing property, all of its associated production equipment, and 70 percent of the net undeveloped acreage it then held. Its only gross income during the 3-year period immediately preceding the close of its taxable year in 1965 consisted of the gain realized by reason of that sale. Held: T failed to qualify as a "Western Hemisphere trade corporation" in 1965 under sec. 921(2) which required that 90 percent or more of its…
1Opinion of the Court
OPINION
Naum, Judge:
The Commissioner determined deficiencies in income tax as follows:
Deficiency TYB Deo. SI—
$1,788,355.04 1965 _
1,408.51 1966 _
As a result of concessions by the parties, the only remaining issue for decision is whether Canadian Kewanee Ltd., one of the corporate petitioners herein, qualified as a Western Hemisphere trade corporation in the year 1965, thereby entitling it to the deduction provided in section 922, I.R.C. 1954. The precise question presented is whether Canadian Kewanee Ltd.’s income from the sale of the bulk of its operating assets may be deemed to have been…
2Cases cited3 opinions
- Commissioner v. LesterSupreme Court of the United States · 1961
- United States v. Boston Buick Co.Supreme Court of the United States · 1931
- Babson Bros. Export Co. v. CommissionerUnited States Tax Court · 1963
3Cited by5 opinions
- Elec. Arts, Inc. v. Comm'rUnited States Tax Court · 2002
- Medchem (P.R.), Inc. v. CommissionerCourt of Appeals for the First Circuit · 2002
- Elec. Arts, Inc. v. Comm'rUnited States Tax Court · 2002
- Electronic Arts, Inc. and Subsidiaries v. CommissionerUnited States Tax Court · 2002
- Kewanee Oil Co. v. CommissionerUnited States Tax Court · 1974