Doylestown & Easton Motor Coach Co. v. Commissioner
United States Tax Court
1. Excess Profits Tax -- Equity Invested Capital -- Property Paid in -- Basis -- Section 718 (a) (2). -- Where a debtor-creditor relationship between affiliates is the result of operating losses of one being paid by the other, which losses have been deducted from group income on consolidated returns, the basis of the creditor for loss on the indebtedness must be reduced by the amount of the losses of the debtor which have offset income on consolidated returns. 2. Id. --…
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1. Excess Profits Tax -- Equity Invested Capital -- Property Paid in -- Basis -- Section 718 (a) (2). -- Where a debtor-creditor relationship between affiliates is the result of operating losses of one being paid by the other, which losses have been deducted from group income on consolidated returns, the basis of the creditor for loss on the indebtedness must be reduced by the amount of the losses of the debtor which have offset income on consolidated returns. 2. Id. -- Basis referred to in section 718 (a) (2) is the basis of the taxpayer. 3. Id. -- When indebtedness is forgiven, it is…
1Opinion of the Court
OPINION.
Murdock, Judge:
The Commissioner determined a deficiency of $24,421.81 in excess profits tax for 1942. He explained:
The sum of $141,418.93 claimed by you to represent a contribution to capital in the year 1932, and claimed by yon as a part of your equity invested capital for the year 1942, has been disallowed.
The only assignment of error is that the Commissioner erred in determining the credit for excess profits tax for 1942 by excluding “paid-in surplus in the sum of $141,418.93.” The facts have been stipulated.
The petitioner was incorporated under the laws of Pennsylvania in February…
2Cases cited2 opinions
- Charles Ilfeld Co. v. HernandezSupreme Court of the United States · 1934
- Bush Terminal Bldgs. Co. v. CommissionerUnited States Tax Court · 1946
3Cited by13 opinions
- Crean Bros., Inc. v. CommissionerUnited States Tax Court · 1950
- National Lead Co. v. CommissionerUnited States Tax Court · 1955
- Carlisle Tire & Rubber Co. v. CommissionerCourt of Appeals for the Third Circuit · 1948
- Tecumseh Coal Corp. v. CommissionerUnited States Tax Court · 1951
- Candy Bros. Mfg. Co. v. CommissionerUnited States Tax Court · 1951
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