- 18 - Colonial terminated its business of hauling packaged freight in 1988.11 It then began selling its operating assets. From 1988 forward, Colonial had no customers. By the end of 1990, Colonial had essentially disposed of its trucking operation assets for cash and cash equivalents. The only trucking assets Colonial retained were its ICC and North Carolina operating authorities. The ICC operating authority had become worthless, and Colonial sold its North Carolina operating authority in 1992 for $5,000. For 3 years prior to the merger, Colonial’s assets consisted principally of tax-exempt bonds and a municipal bond fund.12 During the 3-year period prior to the merger, Colonial held 18 tax-exempt bonds, 16 of which were purchased in 1990 and 1991, and 2 of which were purchased in 1992. One bond was redeemed in 1991, and three bonds were redeemed in 1992 and 1993. Colonial continued to hold the remaining 14 bonds as of the end of 1993. Colonial stopped hauling freight approximately 5 years prior to the merger, had essentially sold all of its operating assets 3 years prior to the merger, and for 3 years prior to the merger kept most of its assets in tax-exempt bonds and a municipal bond 11Colonial principally transported furniture manufactured in North Carolina. 12The passive income from these money management activities caused Colonial to lose its S corporation status at the end of its 1992 tax year pursuant to sec. 1362(d)(3). For the taxable year 1993, Colonial was a C corporation and Central was an S corporation.Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Next
Last modified: May 25, 2011