108 T.C. No. 24
UNITED STATES TAX COURT
AMDAHL CORPORATION AND CONSOLIDATED SUBSIDIARIES, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 2944-95. Filed June 17, 1997.
P paid relocation expenses of its employees and
provided financial assistance in connection with
the sale of their residences. P contracted with
relocation service companies (RSC) to manage the
sale of the employees' residences. The RSC paid
the employees their equity in their homes and paid
the costs of maintaining the residences, including
mortgage and property tax expenses, until third
parties purchased the residences. P reimbursed the
RSC for its expenses and paid the RSC a fee. The
relocating employees retained legal title to the
residences. R disallowed a deduction to P for
certain payments to the RSC against ordinary income
and treated the payments as a capital loss. R
argues that P acquired equitable ownership of the
residences.
Held: Neither P nor the RSC acquired legal or
equitable ownership of the residences for Federal
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