Fishing Tackle Products Co. v. Commissioner
United States Tax Court
An Indiana corporation engaged in the manufacture and distribution of sport fishing equipment leased a factory in Iowa and organized a subsidiary Iowa corporation for purposes of manufacturing a patented new type fishing rod for sale to the parent corporation which distributed such rods nationally. The subsidiary was the parent corporation's sole source of supply of this particular type fishing rod and the subsidiary produced such rods for exclusive sale to the parent.
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An Indiana corporation engaged in the manufacture and distribution of sport fishing equipment leased a factory in Iowa and organized a subsidiary Iowa corporation for purposes of manufacturing a patented new type fishing rod for sale to the parent corporation which distributed such rods nationally. The subsidiary was the parent corporation's sole source of supply of this particular type fishing rod and the subsidiary produced such rods for exclusive sale to the parent. Held, payments by the parent corporation to its subsidiary to reimburse the subsidiary for net operating losses sustained in…
1Opinion of the Court
OPINION.
BRUCE, Judge:
Issue 1.
The first issue for decision is whether petitioner South Bend Bait Company, under the provisions of section 23 (a) (1) (A), Internal Revenue Code of 1939,1 may deduct as ordinary and necessary business expenses paid or incurred in its taxable years ending in 1949 and 1950 the amounts of $52,279.37 and $66,415.77, respectively, which amounts South' Bend had paid to its subsidiary, Fishing Tackle Products Company, to reimburse Tackle for operating losses suffered by it during such taxable years.
The determination of what constitutes an ordinary and necessary business…
2Cases cited16 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Moline Properties, Inc. v. CommissionerSupreme Court of the United States · 1943
- Interstate Transit Lines v. CommissionerSupreme Court of the United States · 1943
- National Carbide Corp. v. CommissionerSupreme Court of the United States · 1949
- Duffy v. Central R. Co. of NJSupreme Court of the United States · 1925
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3Cited by25 opinions
- General Bancshares Corporation v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1964
- A.E. Staley Manufacturing Company and Subsidiaries v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1997
- Fall River Gas Appliance Co. v. CommissionerUnited States Tax Court · 1964
- Florida Publishing Co. v. CommissionerUnited States Tax Court · 1975
- National Starch & Chemical Corp. v. CommissionerUnited States Tax Court · 1989
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