T.C. Memo. 1996-293
UNITED STATES TAX COURT
WALLY FINDLAY GALLERIES INTERNATIONAL, INC. AND SUBSIDIARIES,
Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 15292-94. Filed June 24, 1996.
W's foreign subsidiary F was insolvent for many
years. When economic instability greatly exacerbated
F's financial problems, W wrote off F's intercompany
debt and its investment in F's stock, but continued to
operate F for 3 more years in the hope that F could be
sold as a going concern or that its assets would
increase in value. Held: Deductions for bad debts and
worthless stock on the consolidated return of W's
affiliated group were properly disallowed.
John J. Quinlisk, Anne Showel Quinn, and Patrick J. Bitterman,
for petitioners.
Russell D. Pinkerton, for respondent.
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