125 T.C. No. 8
UNITED STATES TAX COURT
TRIBUNE COMPANY, AS AGENT OF AND SUCCESSOR BY MERGER TO THE
FORMER THE TIMES MIRROR COMPANY, ITSELF AND ITS CONSOLIDATED
SUBSIDIARIES, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 17443-02. Filed September 27, 2005.
In 1998, Times Mirror’s investment subsidiary,
TMD, divested itself of a legal publishing business
through the Bender transaction. The transaction was
intended and designed to qualify as a tax-free
reorganization under sec. 368, I.R.C. R determined
that the transaction was a taxable sale by TMD to Reed.
Held: The primary consideration received in the
transaction was control over $1.375 billion paid by
Reed. Held, further, the Bender transaction did not
qualify as a tax-free reorganization because the terms
and provisions of the contractual documents, as
interpreted and implemented by Times Mirror and Reed,
effected a sale.
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