Culligan Water Conditioning of Tri-Cities, Inc., Successor in Interest to Culligan Water Conditioning of Kennewick, Inc. v. United States

This is a suit for refund of income taxes paid by Culligan Water Conditioning of TriCities, Inc. (Tri-Cities) as a transferee corporation assessed against Culligan Water Conditioning of Kennewick, Inc. (Kenne-wick), the transferor corporation. The district court, after a trial before it based on an agreed statement of facts set forth in the pretrial order as well as certain exhibits and depositions, dismissed Tri-Cities’ suit. We affirm.

The principal issue which this case presents is whether the transfer of assets to Kennewick by Casper Kramis was without recognition of gain or loss pursuant to section 351 of the Internal Revenue Code of 1954. If it was, Tri-Cities must lose; if it was not, Tri-Cities wins. Inasmuch as we have indicated that judgment against TriCities was proper, it follows that we hold that the transfer required no recognition of gain or loss. We also find the procedural claim of Tri-Cities is without merit.

I.

Statutory Structure and Facts.

To understand the critical nature of the above issue, it is necessary to outline the relevant statutory structure and set forth the facts to which this structure must be applied. Tri-Cities acquired Kennewick’s stock…