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stock to the Buyer. This case is controlled by the principles
set forth in Waterman Steamship Corp. v. Commissioner, 430 F.2d
1185 (5th Cir. 1970), revg. 50 T.C. 650 (1968). Here, as in
Waterman Steamship, there was no dividend, only an adjustment in
the sale price of the S&B stock.
Petitioner's dividend argument is nothing more than a
belated attempt by Thor and/or S&B to acquire some perceived tax
advantages by offsetting the intercompany account balance due
from Thor with a dividend from S&B. We hold that S&B neither
declared nor paid a dividend to Thor, and that Thor and the Buyer
merely agreed to cancel the intercompany account balance due from
Thor to S&B as part of the purchase price of the S&B stock.
To reflect the foregoing and the concessions by the parties,
Decision will be entered
under Rule 155.
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