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Central Tablet Mfg. Co. v. United States, 417 U.S. 673 (1974)
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General SummaryThis case is from a collection containing the full text of over 16,000 Supreme Court cases from 1793 to the present. The body of Supreme Court decisions are, effectively, the final interpretation of the Constitution. Only an amendment to the Constitution can permanently overturn an interpretation and this has happened only four times in American history.
Central Tablet Mfg. Co. v. United States, 417 U.S. 673 (1974)
Central Tablet Mfg. Co. v. United States No. 73-593 Argued March 25-26, 1974 Decided June 19, 1974 417 U.S. 673
CERTIORARI TO THE UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
Syllabus
When a fire destroys insured corporate property prior to the corporation’s adoption of a complete plan of liquidation but the fire insurance proceeds are received within 12 months after the plan’s adoption, the gain realized from the excess of such proceeds over the corporate taxpayer’s adjusted income tax basis in the insured property must be recognized and taxed to the corporation, and is not entitled to nonrecognition under § 337(a) of the Internal Revenue Code of 1954, which provides, with certain exceptions, for nonrecognition of gain or loss from a corporation’s "sale or exchange" of property that takes place during the 12-month period following the corporation’s adoption of a plan for complete liquidation effectuated within that period. Pp. 677-691.
(a) The involuntary conversion by fire, recognized as a "sale or exchange" under § 337(a), takes place when the fire occurs prior to the adoption of the liquidation plan, and not at some post-plan point, such as the subsequent settlement of the insurance claims or their payment, since the fire is the single irrevocable event that fixes the contractual obligation precipitating the transformation of the property, over which the corporation possesses all incidents of ownership, into a chose in action against the insurer. Pp. 683-685.
(b) Section 337(a) was enacted in order to eliminate technical and formalistic determinations as to the identity of the vendor, as between the liquidating corporation and its shareholders, and, therefore, the reasons for applying § 337(a) are not present in a situation where the conversion takes place prior to the adoption of the plan when there is no question as to the identity of the owner. Pp. 686-687.
481 F.2d 954, affirmed.
BLACKMUN, J., delivered the opinion of the Court, in which BURGER, C.J., and STEWART, MARSHALL, and REHNQUIST, JJ., joined. WHITE, J., filed a dissenting opinion, in which DOUGLAS, BRENNAN, and POWELL, JJ., joined, post, p. 691.
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Chicago: U.S. Supreme Court, "Syllabus," Central Tablet Mfg. Co. v. United States, 417 U.S. 673 (1974) in 417 U.S. 673 417 U.S. 674. Original Sources, accessed November 24, 2024, http://originalsources.com/Document.aspx?DocID=4JFHA3U9Q8V9CUQ.
MLA: U.S. Supreme Court. "Syllabus." Central Tablet Mfg. Co. v. United States, 417 U.S. 673 (1974), in 417 U.S. 673, page 417 U.S. 674. Original Sources. 24 Nov. 2024. http://originalsources.com/Document.aspx?DocID=4JFHA3U9Q8V9CUQ.
Harvard: U.S. Supreme Court, 'Syllabus' in Central Tablet Mfg. Co. v. United States, 417 U.S. 673 (1974). cited in 1974, 417 U.S. 673, pp.417 U.S. 674. Original Sources, retrieved 24 November 2024, from http://originalsources.com/Document.aspx?DocID=4JFHA3U9Q8V9CUQ.
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