Handy Button Machine Co. v. Commissioner
United States Tax Court
Petitioners, at a time when they held substantial amounts of tax-exempt obligations, purchased shares of their stock. The cash proceeds of some of those obligations were used to make the downpayments, with the balance represented by 6-percent interest-bearing installment notes. Cash derived from subsequent earnings was used to replenish and increase petitioners' holdings of tax-exempt obligations.
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Petitioners, at a time when they held substantial amounts of tax-exempt obligations, purchased shares of their stock. The cash proceeds of some of those obligations were used to make the downpayments, with the balance represented by 6-percent interest-bearing installment notes. Cash derived from subsequent earnings was used to replenish and increase petitioners' holdings of tax-exempt obligations. Such holdings were at all times less than the amounts required to satisfy recognized business needs and were accumulated in accordance with petitioners' long-standing policy. Held, under the…
1Opinion of the Court
Tannenwald, Judge:
Respondent determined deficiencies in petitioners’ income taxes as follows:
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The only issue for our decision is whether petitioners incurred or continued to carry indebtedness in order to purchase or carry tax-exempt municipal obligations within the meaning of section 265 (2) .2
BINDINGS OP FACT
Some of the facts have been stipulated and are found accordingly. The stipulations of facts and attached exhibits are incorporated herein by this reference.
Petitioner Handy Button Machine Co. (hereinafter Button) had its principal office and manufacturing plant in Chicago,…
2Cases cited13 opinions
- The Wisconsin Cheeseman, Inc. v. United StatesCourt of Appeals for the Seventh Circuit · 1968
- John E. Leslie and Evelyn G. Leslie v. Commissioner of the Internal RevenueCourt of Appeals for the Second Circuit · 1969
- Illinois Terminal Railroad Company v. The United StatesUnited States Court of Claims · 1967
- Leslie v. CommissionerUnited States Tax Court · 1968
- Bradford v. CommissionerUnited States Tax Court · 1973
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3Cited by10 opinions
- Izen v. CommissionerUnited States Tax Court · 1975
- Swenson Land & Cattle Co. v. CommissionerUnited States Tax Court · 1975
- Dillon, Read & Co. v. United StatesUnited States Court of Claims · 1988
- Earl Drown Corp. v. CommissionerUnited States Tax Court · 1986
- Estate of Norris v. CommissionerUnited States Tax Court · 1981
5 more not listed; retrieve them via the Exa API.