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plans for the use of such accumulation. Such an
accumulation need not be used immediately, nor must the
plans for its use be consummated within a short period
after the close of the taxable year, provided that such
accumulation will be used within a reasonable time
depending upon all the facts and circumstances relating
to the future needs of the business. Where the future
needs of the business are uncertain or vague, where the
plans for the future use of an accumulation are not
specific, definite, and feasible, or where the
execution of such a plan is postponed indefinitely, an
accumulation cannot be justified on the grounds of
reasonably anticipated needs of the business.
(2) Consideration shall be given to reasonably
anticipated needs as they exist on the basis of the
facts at the close of the taxable year. Thus,
subsequent events shall not be used for the purpose of
showing that the retention of earnings or profits was
unreasonable at the close of the taxable year if all
the elements of reasonable anticipation are present at
the close of such taxable year. However, subsequent
events may be considered to determine whether the
taxpayer actually intended to consummate or has
actually consummated the plans for which the earnings
and profits were accumulated. * * *
Upon determining the amount necessary to satisfy the
"reasonable needs of the business", we shall not simply compare
this amount with the corporation's total accumulated earnings and
profits, but shall examine the amount of accumulated earnings and
profits that is reflected in business-related assets or in idle
net liquid assets of the corporation. Ivan Allen Co. v. United
States, supra at 628; Smoot Sand & Gravel Corp. v. Commissioner,
274 F.2d 495, 501 (4th Cir. 1960), affg. T.C. Memo. 1958-221. In
other words, we must consider whether the corporation's
accumulated earnings and profits have been translated into assets
related to the business, so as to have been employed to meet the
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