International Flavors & Fragrances, Inc. v. Commissioner
United States Tax Court
Petitioner and its foreign affiliates are engaged worldwide in the manufacture and distribution of flavoring extracts. In order to offset any loss which might be sustained in event of the devaluation of the British pound sterling, petitioner entered into a short sale contract for pounds sterling. After the pound was devalued, but before the delivery date, petitioner either sold or closed out its contract.
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Petitioner and its foreign affiliates are engaged worldwide in the manufacture and distribution of flavoring extracts. In order to offset any loss which might be sustained in event of the devaluation of the British pound sterling, petitioner entered into a short sale contract for pounds sterling. After the pound was devalued, but before the delivery date, petitioner either sold or closed out its contract. Held, the gain to petitioner on the transaction is taxable as ordinary income under the principles of Corn Products Co. v. Commissioner, 350 U.S. 46 (1955).
1Concurrence
TaNNENwald, /.,
concurring: I agree ivith the result reached by the majority, but on a different basis, namely, that petitioner realized a short-term capital gain. In so concluding, I eschew issues relating to the reaches of the “integral part of the business” doctrine upon which Corn Products Co. v. Commissioner, 350 U.S. 46 (1955), is founded and to the applicability of section 1233, either directly or by analogy, to transactions of the type involved herein.1 Bather, I rest my conclusion upon the factual basis that Amsterdam was in reality acting on behalf of petitioner in contracting to…
2Cases cited22 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Corn Products Refining Co. v. CommissionerSupreme Court of the United States · 1956
- Rushing v. CommissionerUnited States Tax Court · 1969
- W. B. Rushing v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1971
- Edwin W. Hudspeth and Maxine G. Hudspeth v. United StatesCourt of Appeals for the Eighth Circuit · 1972
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