Fidelity Nat'l Bank & Trust Co. v. Commissioner

Board of Tax Appeals

Fidelity Nat'l Bank & Trust Co. v. Commissioner

14 B.T.A. 904, 1928 BTA LEXIS 2892

CourtUnited States Board of Tax Appeals

DecidedDecember 21, 1928

DocketDocket No. 17708.

StatusPublished

Cited by1 cases

This text of 14 B.T.A. 904 (Fidelity Nat'l Bank & Trust Co. v. Commissioner) is published on Counsel Stack Legal Research, covering United States Board of Tax Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Fidelity Nat'l Bank & Trust Co. v. Commissioner, 14 B.T.A. 904, 1928 BTA LEXIS 2892 (bta 1928).

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Opinion

[906]*906OPINION.

Moeeis:

This proceeding in its last analysis presents but one issue, namely, whether petitioner sustained a loss within the meaning of the taxing statutes by the sale of certain securities to one of its subsidiaries. The cost and sale price of these securities are not in question, but only the. legal significance flowing from the transaction under the applicable provisions of the Revenue Act of 1918. It is admittedly true that the Fidelity Trust, and later the petitioner, were affiliated with the Concordia Loan & Trust Co. during the first five months of 1919, and it is also true that for the remaining seven months of 1919 the Concordia Loan & Trust Co. was not affiliated with either of the aforementioned companies.

[907]*907The sale which gives rise to the question of loss occurred in February, 1919, while the affiliated status existed and respondent holds that under these circumstances the transaction must be considered one between affiliated companies with neither loss nor gain resulting. It is our opinion that in this determination the respondent is correct, and that this is true regardless of the fact that subsequently and during the same calendar year the affiliated status was dissolved.

This principle has been before the Board and has been decided adversely to the contention of the petitioner in a number of cases. In Gould Coupler Co., 5 B. T. A. 499, we distinctly stated that during the continuance of the affiliated status, intercompany obligations and transactions would be disregarded for the purpose of computing the consolidated income and tax liability. See also Farmers Deposit National Bank, 5 B. T. A. 520; Interurban Construction Co., 5 B. T. A. 529; and H. S. Crocker Co., 5 B. T. A. 537. The question presented in the above cited cases was whether a gain or loss resulted from dealing in the stock of its subsidiary by the parent company, and wo held in each case that neither gain nor loss resulted. The doctrine laid down in these cases, in our opinion, applies with equal force to the present set of facts.

Judgment will be entered for the respondent.

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[906]*906OPINION.

Moeeis:

This proceeding in its last analysis presents but one issue, namely, whether petitioner sustained a loss within the meaning of the taxing statutes by the sale of certain securities to one of its subsidiaries. The cost and sale price of these securities are not in question, but only the. legal significance flowing from the transaction under the applicable provisions of the Revenue Act of 1918. It is admittedly true that the Fidelity Trust, and later the petitioner, were affiliated with the Concordia Loan & Trust Co. during the first five months of 1919, and it is also true that for the remaining seven months of 1919 the Concordia Loan & Trust Co. was not affiliated with either of the aforementioned companies.

[907]*907The sale which gives rise to the question of loss occurred in February, 1919, while the affiliated status existed and respondent holds that under these circumstances the transaction must be considered one between affiliated companies with neither loss nor gain resulting. It is our opinion that in this determination the respondent is correct, and that this is true regardless of the fact that subsequently and during the same calendar year the affiliated status was dissolved.

This principle has been before the Board and has been decided adversely to the contention of the petitioner in a number of cases. In Gould Coupler Co., 5 B. T. A. 499, we distinctly stated that during the continuance of the affiliated status, intercompany obligations and transactions would be disregarded for the purpose of computing the consolidated income and tax liability. See also Farmers Deposit National Bank, 5 B. T. A. 520; Interurban Construction Co., 5 B. T. A. 529; and H. S. Crocker Co., 5 B. T. A. 537. The question presented in the above cited cases was whether a gain or loss resulted from dealing in the stock of its subsidiary by the parent company, and wo held in each case that neither gain nor loss resulted. The doctrine laid down in these cases, in our opinion, applies with equal force to the present set of facts.

Judgment will be entered for the respondent.

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Bluebook (online)

14 B.T.A. 904, 1928 BTA LEXIS 2892, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fidelity-natl-bank-trust-co-v-commissioner-bta-1928.

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