-73- fair market value of the new trucks that its subsidiary acquired from those companies. Id. In negotiating the foregoing transactions with G.M.C. and White, Charles E. Mendez (Mendez), the president and chairman of the board of both the taxpayer and its subsidiary, did not indicate to either G.M.C. or White which corporation he was representing, and it made no difference to G.M.C. or White whether they were dealing with the taxpayer or with its subsidiary. Id. Both the taxpayer and its subsidiary used the same address on the checks utilized in the transactions in question even though they were located in different cities in Florida and even though the taxpayer's subsidiary used a different bank account for all of its business activities. Id. G.M.C. and White delivered most of the trucks acquired in the alleged purchases by the taxpayer's subsidiary directly to the taxpayer even though they were ostensibly being sold to that subsidiary for resale to the taxpayer. Id. In addition to reciting the foregoing facts in Redwing Carriers, Inc. v. Tomlinson, supra, the Court of Appeals for the Fifth Circuit observed that "a definite contractual inter- dependency between the sale of new trucks and the trade-in of old trucks" existed, id., in that there "would have been no purchase by * * * [the taxpayer's subsidiary] of new trucks or tractors without concurrent and binding agreements to purchase * * * [the taxpayer's] used equipment", id. (quoting the U.S. District Court's opinion in Redwing Carriers, Inc. v. Tomlinson, 19 AFTRPage: Previous 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 Next
Last modified: May 25, 2011