American Potash & Chemical Corp. v. United States

399 F.2d 194 (1968)

From our private database of 46,000+ case briefs, written and edited by humans—never with AI.

American Potash & Chemical Corp. v. United States

United States Court of Claims
399 F.2d 194 (1968)

KS

Facts

Between September 1954 and November 1955, American Potash & Chemical Corp. (American Potash) (plaintiff) acquired all of the outstanding stock of Western Electrochemical Company (Wecco) in exchange for over 66,000 shares of American Potash voting stock and over $400 paid for fractional shares. The acquisitions were made over a 14-month period. From December 1955 until June 30, 1956, American Potash operated Wecco. On June 30, 1956, Wecco was completely liquidated, with all of its assets distributed to and liabilities assumed by American Potash. During tax years 1957 through 1960, Potash computed its depreciation deduction for depreciable assets from Wecco on an adjusted basis of over $7 million. Prior to the liquidation, Wecco’s basis in these assets was approximately $3.7 million. The Internal Revenue Service audited American Potash’s 1956 and 1957 tax returns and determined that the correct basis for the Wecco assets was approximately $3.7 million. The Commissioner of Internal Revenue (the commissioner) (defendant) reduced the amount of the depreciation deduction taken by American Potash. American Potash paid the 1957 deficiency and adjusted its 1958, 1959, and 1960 tax returns to include the increased taxes determined by the commissioner. American Potash filed claims for the increased taxes paid for all four years and a lawsuit for a refund on income taxes. The commissioner filed a motion for summary judgment arguing that American Potash was limited to the carryover basis of Wecco’s assets because either the transaction was a C reorganization or a liquidation of a wholly owned subsidiary by a parent corporation.

Rule of Law

Issue

Holding and Reasoning (Laramore, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 742,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.

    Unlock this case briefRead our student testimonials
  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.

    Learn about our approachRead more about Quimbee

Here's why 742,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 46,000 briefs, keyed to 986 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.

Access this case brief for FREE

With a 7-day free trial membership
Here's why 742,000 law students have relied on our case briefs:
  • Reliable - written by law professors and practitioners, not other law students
  • The right length and amount of information - includes the facts, issue, rule of law, holding and reasoning, and any concurrences and dissents
  • Access in your class - works on your mobile and tablet
  • 46,000 briefs - keyed to 986 casebooks
  • Uniform format for every case brief
  • Written in plain English - not in legalese and not just repeating the court's language
  • Massive library of related video lessons - and practice questions
  • Top-notch customer support

Access this case brief for FREE

With a 7-day free trial membership