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purpose of evading or avoiding Federal income tax by securing the
benefit of deductions, credits, or other allowances that the
acquiring person or corporation would not otherwise enjoy, the
Secretary may disallow such deductions, credits or other
allowances.30 Accordingly, section 269(a) is not applicable31
30 Sec. 269(a) provides, in part, as follows:
SEC. 269(a). In General.--If--
(1) any person or persons acquire, or acquired on
or after October 8, 1940, directly or indirectly,
control of a corporation, or
(2) any corporation acquires, or acquired on or
after October 8, 1940, directly or indirectly, property
of another corporation, not controlled, directly or
indirectly, immediately before such acquisition, by
such acquiring corporation or its stockholders, the
basis of which property, in the hands of the acquiring
corporation, is determined by reference to the basis in
the hands of the transferor corporation,
and the principal purpose for which such acquisition was
made is evasion or avoidance of Federal income tax by
securing the benefit of a deduction, credit, or other
allowance which such person or corporation would not
otherwise enjoy, then the Secretary may disallow such
deduction, credit, or other allowance. * * *
31 The instant controversy has its origin in petitioner's
acquisition of Tri-Power and the subsequent dropdown. The
parties dispute whether sec. 269(a)(2) can separately apply to
the dropdown. We conclude that it is unnecessary to address the
dropdown dispute because, as discussed supra in our findings of
fact, we found that the dropdown was an integral part of
petitioner's plan to acquire Tri-Power. Accordingly, we shall
look to the purposes of the overall plan of acquisition to decide
whether the principal purpose for the acquisition and dropdown
was tax avoidance. See, e.g., Key Buick Co. v. Commissioner,
T.C. Memo. 1976-303 (where the issue of whether the transactions
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