American Light & Traction Co. v. Commissioner
United States Board of Tax Appeals
1. GAIN OR LOSS - BASIS. - The necessary continuity of proprietary interest in transferred property was lacking where the transferor received only bonds of transferee, there was no reorganization and no retention of the old basis. 2. ESTOPPEL. - The taxpayer is not estopped to have its taxes for 1930 and 1931 determined in accordance with the statute where the Commissioner, with full knowledge of the facts, failed to collect taxes due for 1928 because he thought an exchange…
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1. GAIN OR LOSS - BASIS. - The necessary continuity of proprietary interest in transferred property was lacking where the transferor received only bonds of transferee, there was no reorganization and no retention of the old basis. 2. ESTOPPEL. - The taxpayer is not estopped to have its taxes for 1930 and 1931 determined in accordance with the statute where the Commissioner, with full knowledge of the facts, failed to collect taxes due for 1928 because he thought an exchange in that year was a reorganization and the gain not recognized.
1Opinion of the Court
OPINION.
MtjRDOCK :
The Commissioner determined a deficiency of $550,227.83 in income tax for 1930 and one of $309,597.44 for 1931. The facts have been stipulated. The petitioner assigned as error the action of the Commissioner in computing a profit to its four subsidiaries from the sale of debentures at face value, by refusing to allow the use of their cost as basis, the cost being equal to the amount realized from the sale. The Commissioner, by amended answer filed at the hearing, raises the issue of whether the petitioner is estopped to deny that a lower basis (cost of property given in 1928…
2Cases cited3 opinions
- R. H. Stearns Co. v. United StatesSupreme Court of the United States · 1934
- LeTulle v. ScofieldSupreme Court of the United States · 1940
- Helvering v. SalvageSupreme Court of the United States · 1936
3Cited by10 opinions
- Badger Materials, Inc. v. CommissionerUnited States Tax Court · 1963
- Bartel v. CommissionerUnited States Tax Court · 1970
- American Light & Traction Co. v. HarrisonCourt of Appeals for the Seventh Circuit · 1944
- American Light & Traction Co. v. CommissionerUnited States Board of Tax Appeals · 1940
- American Light & Traction Co. v. HarrisonCourt of Appeals for the Seventh Circuit · 1944
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