Commissioner of Internal Revenue v. Moline Properties, Inc.
| Decision Date | 11 December 1942 |
| Docket Number | No. 10279.,10279. |
| Citation | 131 F.2d 388 |
| Parties | COMMISSIONER OF INTERNAL REVENUE v. MOLINE PROPERTIES, Inc. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Samuel O. Clark, Jr., Asst. Atty. Gen., Sewall Key and Benjamin M. Brodsky, Sp. Assts. to Atty. Gen., J. P. Wenchel, Chief Counsel, Bureau of Internal Revenue, and Charles E. Lowery, Sp. Atty., Bureau of Internal Revenue, all of Washington, D. C., for petitioner.
Douglas D. Felix, of Miami, Fla., for respondent.
Before SIBLEY, HOLMES, and McCORD, Circuit Judges.
The petition involves income and excess-profits taxes for the years 1935 and 1936, and a delinquency penalty for the year 1936. The facts are stated in detail by the Board of Tax Appeals in its reported opinion, Moline Properties, Inc., v. Commissioner of Internal Revenue, 45 B.T.A. 647.
The respondent, Moline Properties, Inc., was organized in 1928, and at all times Uly O. Thompson has been its president and sole stockholder, with the exception of holders of qualifying shares. The corporation was organized at the suggestion of Thompson's creditors as a means of protecting investments and saving his equity in certain parcels of real estate located in Florida; the mortgagee having agreed to advance further funds on condition that the corporation should be organized. The property was conveyed by Thompson to the corporation, and the stock issued to him was pledged with the mortgagee and placed in a voting trust. On July 29, 1933, the corporation satisfied the two outstanding mortgages with funds secured from a new mortgage loan. Control of the corporation was returned to Thompson in 1933.
Moline Properties, Inc., did not keep books of account or maintain a bank account. It owned no assets other than the real estate. In 1934 it leased a portion of its properties for use as a parking lot and received $1,000 as rental. Thompson owned other extensive real property holdings in Miami, Florida, title to all of which was in his name individually.
The real property held by Moline Properties, Inc., was sold in three separate parcels, one each in the years 1934, 1935, and 1936. The corporation transacted no further business after sale of the last parcel of property in 1936. The Board of Tax Appeals sustained the taxpayer's contentions and held that the corporation functioned merely as an agent for Thompson; that the corporate existence must be disregarded in taxing the gains from the sales of...
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Moline Properties v. Commissioner of Internal Revenue 16 8212 19, 1943
...Thompson for reasons sufficient to him, must now be recognized in the taxation of the income of the corporation. Commissioner v. Moline Properties, Inc., 5 Cir., 131 F.2d 388. The doctrine of corporate entity fills a useful purpose in business life. Whether the purpose be to gain an advanta......
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Burr v. Commissioner
... ... to tax for fraud under Section 6653(b) of the Internal Revenue Code of 1954 for each of the fiscal years ended May ... him to use one of the offices of Remington Associates, Inc., a corporation apparently controlled by Mandell. In ... Commissioner v. Moline Properties 42-2 USTC ¶ 9728, 131 F. 2d 388, 389 (C. A ... ...
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Gray Holding Corp. v. Clauson
...on the profits from the sale. The Board of Tax Appeals, 45 B.T.A. 647, held for the taxpayer, but the Court of Appeals reversed, 5 Cir., 131 F.2d 388. The Supreme Court ruled that the corporate form could not be disregarded, and upheld the judgment for the The Moline Properties case is clea......
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Shannon v. Comm'r of Internal Revenue
...not altered by the mere fact that the transferors of the property owned all of the stock in the corporation. Commissioner v. Moline Properties, 131 F.2d 388, 389 (C.A. 5, 1942), affd. 319 U.S. 436 (1943); Skarda v. Commissioner, 250 F.2d 429 (C.A. 10, 1957), affirming 27 T.C. 137 (1956). It......
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Tax consequences of de facto liquidations.
...Generally, a corporation is respected as a distinct entity and not ignored unless it is used to defraud the law (Moline Properties, Inc., 131 F.2d 388 (5th Cir. 1942)). However, under specific facts, a corporation may be deemed to have liquidated for income tax purposes without an actual le......