Four Twelve West Sixth Co. v. Commissioner
United States Tax Court
Pursuant to a plan of reorganization, petitioner acquired from a bondholders' protective committee certain depreciable and other assets of an insolvent corporation in exchange for 49 per cent of its common capital stock. Petitioner's remaining common stock and its outstanding preferred stock were sold for cash to outside interests.
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Pursuant to a plan of reorganization, petitioner acquired from a bondholders' protective committee certain depreciable and other assets of an insolvent corporation in exchange for 49 per cent of its common capital stock. Petitioner's remaining common stock and its outstanding preferred stock were sold for cash to outside interests. Held, petitioner's basis for depreciation is cost, which is measured by the fair market value of the stock issued for assets and the amount of liabilities assumed.
1Opinion of the Court
OPINION.
Arnold, Judge:
These proceedings involve income and excess profits taxes as follows:
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The principal issue is the basis to be used for depreciation purposes, i. e., whether cost or fair market value. The other issue is whether petitioner realized additional income for the taxable years by virtue of collections on certain accounts and notes receivable which had no cost basis on petitioner’s books. A third error, relating to the taxable year 1939, was apparently abandoned, as the allegations were not pressed.
The stipulated facts are adopted as our findings of fact. The…
2Cases cited2 opinions
- Helvering v. Alabama Asphaltic Limestone Co.Supreme Court of the United States · 1942
- Palm Springs Holding Corp. v. CommissionerSupreme Court of the United States · 1942
3Cited by8 opinions
- C. D. Johnson Lumber Corp. v. CommissionerUnited States Tax Court · 1949
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- Peabody Hotel Co. v. CommissionerUnited States Tax Court · 1946
- Clarence Whitman & Sons v. CommissionerUnited States Tax Court · 1948
- Four Twelve West Sixth Co. v. CommissionerUnited States Tax Court · 1946
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