Crean Bros., Inc. v. Commissioner of Internal Revenue

MARIS, Circuit Judge.

This petition by the taxpayer to review a . decision of the Tax Court against it presents the question whether the taxpayer is entitled, under Section 718(a) (2) 1 2of the Internal Revenue Code, to include the sum of $99,965.05’ in its equity invested capital for the purpose of computing the tax on its excess profits for the year 1945. This sum represented an indebtedness owing from the taxpayer to Hudson Coal Company which that company had gratuitously cancelled in 1938. Hudson Coal Company was the majority stockholder of the taxpayer’s principal stockholder. The facts…