Truck Terminals, Inc., on Review v. Commissioner of Internal Revenue, on Review

This matter is before us on the petition of Truck Terminals, Inc. (Truck Terminals), to review a decision of the Tax Court redetermining deficiencies in petitioner’s income taxes for 1952, 1953 and 1954. The findings of fact and opinion of the Tax Court are reported in 33 T.C. 876 . We have jurisdiction under section 7482 of the Internal Revenue Code of 1954.

The problem before us concerns the basis to be attributed to seventy-eight pieces of motor vehicle equipment in computing depreciation and long-term capital gain during the years in question.

Truck Terminals, a Nevada corporation, was organized on April 23, 1951 by F. M. Hodge, Henry N. Hodge and William E. Mullikin. The company was originally organized for the purpose of acquiring certain real property from Fleetlines, Inc., (Fleetlines), a Nevada corporation, organized in 1947, in which the Hodges and 'Mullikin were the principal shareholders. Some steps were taken to effectuate that purpose, but, due to a change of plans, Truck Terminals was not actively engaged in any business between August, 1951 and March, 1952. It then had no capital, no enforceable stock subscriptions, .no assets, and a debt of $100.

During that…

(concurring and dissenting).

I concur in the last part, that is, the part of the opinion which rejects petitioner’s construction of 113(a) (8) of the Internal Revenue Code of 1939, where-under it asserts that Fleetlines and Truck Terminals could close the door on the commissioner by Fleetlines’ mere act of paying the capital gain tax: that thereby the issue was determined. Literally there is a lot to be said for the construction, but I do not believe the Congress intended to leave the gate that far ajar. Counsel for petitioner is to be complimented on his ingenuity.

But I have trouble upholding the recasting of the basic transaction to one of a simple exchange of Fleetlines’ trucks for capital stock of Truck Terminals. Normally I would think Commissioner of Internal Revenue v. Duberstein, 363 U.S. 278 , 80 S.Ct. 1190 , 4 L.Ed.2d 1218 , would indicate affirmance here. But, I am troubled by a circumstance in the case, which is perhaps understandable tactics, on which neither of the parties has said very much.

In this case, in the tax court, the transaction of the “sale” of the trucks *458 was attacked under Section 15(c) of the Internal Revenue Code of 1939, an excess profits…

314 F.2d 449 63-1 USTC P 9317 TRUCK TERMINALS, INC., Petitioner on Review, v. COMMISSIONER OF INTERNAL REVENUE, Respondent on Review. No. 17167. United States Court of Appeals Ninth Circuit. Feb. 20, 1963. Russell & Schureman, and Theodore W. Russell, Los Angeles, Cal., for petitioner. Louis F. Oberdorfer, Asst. Atty. Gen., Lee A. Jackson, A. F. Prescott, Charles B. E. Freeman, and Meyer Rothwack, Attorneys, Department of Justice, Washington, D.C., for respondent. Before CHAMBERS, HAMLEY and DUNIWAY, Circuit Judges. HAMLEY, Circuit Judge. 1 This matter is before us on the petition of Truck Terminals, Inc. (Truck Terminals), to review a decision of the Tax Court redetermining deficiencies in petitioner's income taxes for 1952, 1953 and 1954. The findings of fact and opinion of the Tax Court are reported in 33 T.C. 876 . We have jurisdiction under section 7482 of the Internal Revenue Code of 1954. 2 The problem before us concerns the basis to be attributed to seventy-eight pieces of motor vehicle equipment in computing depreciation and long-term capital gain during the years in question. 3 Truck Terminals, a Nevada corporation, was organized on April 23, 1951 by F. M. Hodge,…