Roosevelt Hotel Co. v. Commissioner
United States Tax Court
Hotel Holding Co. defaulted on its bonds and the indenture trustee took possession in 1931 for the bondholders. In 1935 the bondholders, pursuant to a plan of reorganization, organized petitioner and bought in the property for the petitioner at foreclosure sale. Stock in petitioner was issued to the bondholders in proportion to their holdings.
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Hotel Holding Co. defaulted on its bonds and the indenture trustee took possession in 1931 for the bondholders. In 1935 the bondholders, pursuant to a plan of reorganization, organized petitioner and bought in the property for the petitioner at foreclosure sale. Stock in petitioner was issued to the bondholders in proportion to their holdings. Cash held by the trustee and money borrowed by petitioner were placed in escrow to pay accrued taxes, other debts, and claims of nondepositing bondholders. Over 98 per cent in value of the bonds was exchanged for stock, the remainder being surrendered…
1Opinion of the Court
OPINION.
Arnold, Judge:
The first issue is whether petitioner is entitled to use, for computing depreciation and equity invested capital, the basis of certain assets in the hands of the preceding owner, the Hotel Holding Co. of Hollywood, Ltd.
Under section 113 (a) (7) of the Internal Revenue Code,1 if property was acquired in 1935 by a corporation in connection with a reorganization and immediately after the transfer an interest or control in such property of 50 per cent or more remained in the same persons or any of them, the basis shall be the same as it would be in the hands of the…
2Cases cited8 opinions
- Helvering v. Alabama Asphaltic Limestone Co.Supreme Court of the United States · 1942
- Helvering v. Southwest Consolidated Corp.Supreme Court of the United States · 1942
- Claridge Apartments Co. v. CommissionerSupreme Court of the United States · 1944
- Palm Springs Holding Corp. v. CommissionerSupreme Court of the United States · 1942
- Bondholders Committee v. CommissionerSupreme Court of the United States · 1942
3 more not listed; retrieve them via the Exa API.
3Cited by8 opinions
- Howard v. CommissionerUnited States Tax Court · 1955
- San Antonio Transit Co. v. CommissionerUnited States Tax Court · 1958
- Pearson Hotel, Inc. v. United StatesDistrict Court, N.D. Illinois · 1959
- Stockton Harbor Indus. Co. v. CommissionerUnited States Tax Court · 1952
- Howard v. CommissionerUnited States Tax Court · 1955
3 more not listed; retrieve them via the Exa API.