Victor Meat Co. v. Commissioner
United States Tax Court
Petitioner purchased for a lump sum a mixed aggregate of current and fixed assets. The current assets were comprised of cash, trade and employee receivables, inventory, supplies, and prepaid expenses, including prepaid insurance. Petitioner treated the aforementioned current assets as "equivalent to cash" in allocating the lump-sum purchase price.
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Petitioner purchased for a lump sum a mixed aggregate of current and fixed assets. The current assets were comprised of cash, trade and employee receivables, inventory, supplies, and prepaid expenses, including prepaid insurance. Petitioner treated the aforementioned current assets as "equivalent to cash" in allocating the lump-sum purchase price. Held, only the prepaid expenses, including the prepaid insurance, are "equivalent to cash" in allocating the lump-sum purchase price among the assets under sec. 1012, I.R.C. 1954.
1Opinion of the Court
OPINION
The sole issue concerns the proper basis of assets which petitioner acquired in June 1964.
The parties are in agreement as to the legal principles involved herein. Their dispute reaches only to the application of those principles to the facts of the instant case.
Section 10123 of the Code and section 1.1012-1 of the regulations thereunder provide that the basis of property is generally the cost of such property. Neither the Code nor the regulations provide any additional assistance in determining what is the cost of the separate items of a lump-sum purchase of an integral business. It is…
2Cases cited4 opinions
- C. D. Johnson Lumber Corp. v. CommissionerUnited States Tax Court · 1949
- F. & D. Rentals, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1966
- F. & D. Rentals, Inc. v. CommissionerUnited States Tax Court · 1965
- Boise Cascade Corporation v. United StatesDistrict Court, D. Idaho · 1968
3Cited by19 opinions
- Bixby v. CommissionerUnited States Tax Court · 1972
- Banc One Corp. v. CommissionerUnited States Tax Court · 1985
- UFE, Inc. v. CommissionerUnited States Tax Court · 1989
- R. M. Smith, Inc. v. CommissionerUnited States Tax Court · 1977
- Nestle Holdings v. CommissionerUnited States Tax Court · 1995
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