Taxation-Federal Commons^™

Turnbow V. Commissioner—Rejection Of The "Boot" Exception To A Type B Reorganization?, F. Robert Debruyn

Washington Law Review

The United States Supreme Court in Turnbow v. Commissioner may have interpreted the Internal Revenue Code to preclude the receipt of "boot" in a non-taxable, stock for stock reorganization. Although the Court was interpreting the application of Section 112 of the 1939 Code, the decision may be decisive in the interpretation of the parallel sections in the 1954 Code.

Taxation-Federal Income Tax-Enjoining Collection, D. Michael Kratchman S.Ed.

Michigan Law Review

Taxpayer sued to enjoin collection of federal insurance contributions and unemployment taxes with respect to certain fishermen who worked on boats operated by the corporate taxpayer. The Government contended that under the Internal Revenue Code an injunction could not be sustained on a showing of non-liability. The district court issued the injunction on the grounds that the tax was illegal because no employer-employee relationship in fact existed and that collection of the tax would ruin the corporation financially. The court of appeals affirmed, holding that a taxpayer may enjoin the collection of a federal tax when he shows its illegality …

Federal Income Taxation-Accounting Methods-Accounting For Prepayments And Estimated Future Expenses, Jerome M. Salle S.Ed.

Michigan Law Review

"It is the essence of any system of taxation that it should produce revenue ascertainable, and payable to the government, at regular intervals." In order to obtain regular periodic revenues from the federal income tax, Congress requires all taxpayers to determine their taxable income annually.

Income may be defined as "value added" as a result of a given economic activity. Logically, the most opportune time to measure income occurs whenever that activity has ended, for at that time the continuous growth or contraction in the attributable value will likewise have ended and the income or loss from the activity will …

Taxation-Federal Income Tax- Taxpayer's Dividend To Shareholders Allowable As Amortizable Bond Premium Deduction, H. C. Snyder Jr., S.Ed.

Michigan Law Review

In an effort to make an amount distributed to its shareholders tax deductible, taxpayer bought utility bonds which were selling at a large premium and which were callable on thirty days' notice. Taxpayer borrowed an amount equal to the lowest call price, mortgaged the bonds to secure the loan, and paid cash equal to the difference, i.e., the premium in this case. After holding the bonds for thirty days, taxpayer declared a dividend of the bonds and distributed them to its shareholders subject to the indebtedness. The shareholders sold the bonds, paid off the loan from the proceeds, and …

Book Reviews, Charles E. Clark, Milton R. Konvitz, Clyde V. Kiser, William M. Beaney, Morton Gitelman, Mitchell Rogovin, Daniel J. Dykstra, Wallace Mcclure, Albert A. Ehrenzweig

Journal of Legal Education

No abstract provided.

Taxation-Federal Income Tax-Liquidation Distributions Entitled To Both Capital Gains Treatment And Foreign Tax Credit, Lloyd C. Fell

Michigan Law Review

Plaintiff, Associated, is an American corporation whose wholly-owned subsidiary, Automatic, owned all the stock of Filcrest, a Canadian corporation. In 1954 all the assets of Filcrest were distributed to Automatic pursuant to a plan of complete liquidation, accomplished in accordance with Canadian law. In its 1954 consolidated return, plaintiff treated the gain realized on the Filcrest liquidation as a capital gain, and also claimed a foreign tax credit for any Canadian income, war or excess profits taxes which Filcrest had paid over the years to Canada on that part of the liquidation distribution which represented Filcrest's accumulated earnings and profits. …

Taxation-Federal Income Tax-Transfers Of Mineral Rights In Soil Deposits As Lease Or Sale, Philip Sotiroff

Michigan Law Review

Petitioner executed a written agreement with a contractor in 1954 whereby the contractor acquired the right to enter petitioner's land and extract sand and gravel for a fixed amount per cubic yard. This agreement was terminated in 1955 when the excavations had reached the desired level of street access. Petitioner had entered into a previous oral agreement in 1949 with a different party for the sale of the gravel on the same land down to the same elevation, but that party had not fully exploited the agreement. Petitioner claimed that the agreements were sales of sand and gravel in place …

Taxation-Federal Income Tax-Worthless Debt Of Corporation Deductible Only As A Nonbusiness Bad Debt By Creditor-Partnership, Larry W. Waggoner

Michigan Law Review

A partnership formed for the purpose of holding and renting real estate and "such other business and enterprises" as might be agreed upon by the partners loaned 120,000 dollars to a corporation which manufactured liquid hair spray for women. This was the only loan the partnership had made. The controlling shareholder in the debtor-corporation was another corporation of which every shareholder was either a parent or grandparent of the partners. The debtor-corporation was to repay the loan in monthly installments of 3,000 dollars plus interest at the rate of twelve percent on the unpaid balance. When the debt became worthless, …

Taxation-Federal Income Taxation-Examination Of Certain Problems Under Section 335, Roger B. Harris S.Ed.

Michigan Law Review

Stock and securities of controlled corporations may be distributed to shareholders, tax free, in cases of corporate separations which qualify under section 355 of the Internal Revenue Code of 1954. A corporate separation is effected by the transfer of part of a corporation's assets to a subsidiary, the stock of which is distributed to the parent's stockholders. Such distributions are generally classified into three categories: spin-off, split-off, and split-up. A spin-off occurs when corporation A forms corporation B to which A transfers certain assets, receiving in exchange, the stock of corporation B. A then distributes the stock of …

Taxation-Federal Income Tax-Religious Order Not Exempt From Supplment U Tax As A Church, Alan Rothenberg

Michigan Law Review

Plaintiff, a non-profit, membership corporation consists of members of the Christian Brothers Order, and was established to furnish religious and secular education to youth. The Catholic Church considers religious instruction to be the performance of a church function, and property of the Christian Brothers Order is church property according to Roman Catholic canon law. During the taxable years in question plaintiff owned and operated a novitiate, Catholic schools, homes for the Brothers, and a winery and distillery. Plaintiff was assessed and paid $489,800.83 as a Supplement U tax on its unrelated business income realized from the winery and distillery operation. …

Tax Planning For The Hobby Enthusiast, Daniel U. Livermore Jr.

William & Mary Law Review

No abstract provided.

Federal Tax Lien--Effect Of State Statute Of Limitations, James Kilgore Edmundson Jr.

West Virginia Law Review

No abstract provided.

Taxation-Federal Income Tax-Strike Insurance Agreements, Robert A. Butler S.Ed.

Michigan Law Review

Contracts indemnifying persons or corporations for losses and damage resulting from an interruption of business due to strikes have existed at least since the beginning of this century. The Mutual Security Company of Connecticut, for example, wrote such a policy for the Buffalo Forge on April 9, 1906. In more recent times, strike insurance agreements have been instituted in major industries, and their impact on collective bargaining has been the subject of some controversy. The purpose of this comment is to consider the federal income tax questions which arise from such arrangements. Specifically, attention is directed to the deductibility of …

Federal Taxation Of Life Insurance Wealth, R. Dale Swihart

Indiana Law Journal

No abstract provided.

Corporate Employee Tax Status For The Professional Man, Carmen A. Stavole

Cleveland State Law Review

Professional associations (i.e., corporations) have been specifically authorized by several state legislatures recently, contrary to the old rule that practice of a learned profession by a corporation is forbidden. Among these states are Connecticut, Illinois, Ohio, Oklahoma, Pennsylvania and Wisconsin. The purpose is to make available to professional men the tax advantages of corporate employee status.

Stock Options For Directors In Small Corporations, Robert H. Moore Jr.

Cleveland State Law Review

The treatment stock options have received since the enactment of Section 421 of the 1954 Code has come under much criticism. Section 421 of the Code authorizes the so-called "restricted"stock options. It is not the purpose of this paper, however, to enter the controversy about restricted stock options but to consider the so-called "non-restricted" and to suggest revisions in the law that appear merited with respect to them.

Corporate Employee Tax Status For The Professional Man, Carmen A. Stavole

Cleveland State Law Review

Professional associations (i.e., corporations) have been specifically authorized by several state legislatures recently, contrary to the old rule that practice of a learned profession by a corporation is forbidden. Among these states are Connecticut, Illinois, Ohio, Oklahoma, Pennsylvania and Wisconsin. The purpose is to make available to professional men the tax advantages of corporate employee status.

Bankruptcy-Federal Tax Claims-Accrual Of Post-Petition Interest, Robert Lane

Michigan Law Review

In 1953 taxpayer filed a petition and was discharged in bankruptcy owing federal withholding and social security taxes for 1951. In 1958 taxpayer became entitled to a refund on his 1953-1954 taxes. The Commissioner applied a portion of this ·refund against the balance of the tax for the year 1951, plus accrued interest to 1958. Taxpayer claimed that he was not liable for the interest which had accrued during the period between the date of petition in bankruptcy and the date of refund. When the Commissioner disallowed his claim, the taxpayer brought an action in district court to recover the …

Taxation-Federal Income Tax-Accrual Of State Property Taxes Paid Under Protest, Robert L. Harmon

Michigan Law Review

During the years 1946 to 1950 a local tax upon respondent's real property was assessed at one hundred dollars. Respondent paid the full assessment to avoid interest penalties and seizure and sale of the property under tax liens, but contested the assessment in the state court, denying any liability greater than eighty-five dollars. In each of the preceding years, complying with a private ruling directed to it by the Commissioner, respondent had deducted the full one hundred dollars, and, when in 1951 the tax was fixed by the state court at ninety-five dollars, respondent included the five-dollar refund in its …

The Gray Fleece Of The Crimson Catt: A Primer Of Tax Nonsense, John Batt

Kentucky Law Journal

No abstract provided.

Tax Policy And Preferential Provisions In The Income Tax Base, Walter J. Blum

Kentucky Law Journal

No abstract provided.

Personal Deductions And The Federal Income Tax--Some Suggestions For Revisions, Ray Trammell

Kentucky Law Journal

No abstract provided.

Taxation - Federal Income Tax - Capital Gain Treatment Of Amount Received From Sublessee By Lessee-Sublessor For Surrender Of Lease To Lessor, Paul Tractenberg

Michigan Law Review

The lessor and the sublessee of a valuable piece of business property sought to remove the intervening interest of petitioner, the lessee-sublessor. Petitioner agreed to release to the lessor all his right and interest in the leasehold and in consideration therefor petitioner received a sum of money from the sublessee. The Tax Court decided in a deficiency proceeding that the entire amount should be taxed as ordinary income on the ground that it was merely a substitute for future rental payments. On appeal, held, reversed. Since the substance of the transaction was the transfer of the leasehold from the …

Taxation - Federal Income Tax - Deductibility Of Seminar Cruise As Business Expense, Thomas W. Van Dyke

Michigan Law Review

Petitioner, a physician, participated in a postgraduate medical seminar held aboard a passenger ship during an eighteen-day cruise of the Mediterranean. A number of hour-long lectures followed by discussion periods were held on the ship during each of the six or seven days it was at sea and occasionally while in port; additional study was not required. Petitioner spent most of his time in leisurely activities aboard ship and in sightseeing. All expenses of the course and cruise were included in one charge which petitioner claimed as an ordinary and necessary business expense under section 162 (a) . The Commissioner …

A Critique Of The Business-Purpose Doctrine, Robert S. Summers

Cornell Law Faculty Publications

The aims of this article are: (1) to define the nature and significance of the business-purpose doctrine as applied in the field of Federal income taxation; (2) to summarize several considerations that support abandonment of the doctrine; and (3) to consider whether a substitute doctrine is needed. Several recent cases indicate that the influence of the business-purpose doctrine is declining, and in the recent case of Knetsch v. United States the Supreme Court appears to have substituted an alternative doctrine. The dual thesis of the present article is that the business-purpose doctrine ought to be abandoned and that there is …

Revenue Procedure 60-18—New Techniques For The Early Consideration And Disposition Of Tax Court Cases, Melvin L. Sears

Washington Law Review

With the promulgation of Revenue Procedure 60-18 (published in IRB No. 1960-37, p. 61), the Internal Revenue Service has again instituted a procedure for the benefit of the taxpayers, the tax Bar, the Tax Court and the Service. The effective operation of this new procedure undoubtedly will prove to be of substantial benefit to all parties concerned by securing a fair and expeditious disposition, either by settlement or trial, of tax controversies before the Tax Court.

Taxation- Federal Income Tax-Status Of Stock-For-Stock Exchange Where Boot Is Involved, Roger B. Harris S. Ed

Michigan Law Review

Taxpayer was the sole stockholder of International Dairy Supply Company. In 1952, Foremost Dairies, Inc. acquired from taxpayer all his stock in Supply Company in exchange for 82,375 shares of Foremast's common stock and 3,000,000 dollars cash. Taxpayer reported as gain from the transaction only the 3,000,000 dollars "boot" received, less allowable expenses. The Commissioner determined a deficiency of 278,823 dollars, asserting that the nonrecognition provision of the 1939 Code counterpart of section 356 (a) (1) was inapplicable and therefore taxpayer's entire gain realized on the disposition must be recognized. The Tax Court upheld taxpayer's contention that by virtue of …

The Deductability Of Moving Expenses And Investigatory Expenses, Bernard Goldstein

William & Mary Law Review

No abstract provided.

The Civil Aspects Of The Net Worth Method, Richard D. Schwab

William & Mary Law Review

No abstract provided.

Federal Income Taxation: Meals And Lodging Furnished For The Convenience Of The Employer - Two Sequels To The Boykin Case, Rexford R. Cherryman

William & Mary Law Review

No abstract provided.