Opinion
Civil Action No. 61 C 1568
May 6, 1963
63-2 U.S. Tax Cas. (CCH) P9506; 11 A.F.T.R.2d (RIA) 1654
Findings of Fact and Conclusions of Law Findings of Fact
1. The facts stipulated to by the parties are found by the Court.
2. Prior to the merger of Continental Sales Enterprises, Inc., I. X. C. Corporation and S. M. Coleman Co., Continental Sales Enterprises, Inc. (formerly Armand, Inc.) was a mere corporate shell.
3. Prior to the merger, Continental Sales Enterprises, Inc. (formerly Armand, Inc.) virtually consisted of nothing other than a net operating loss accumulation.
4. There was no business purpose for including Continental Sales Enterprises, Inc. (formerly Armand, Inc.) in the merger.
5. The sole reason for including Continental Sales Enterprises, Inc. (formerly Armand, Inc.) in the merger was to attempt to utilize the net operating loss accumulation of Armand, Inc.
6. The inclusion of Continental Sales Enterprises, Inc. (formerly Armand, Inc.) in the merger was a "sham" without reality or substance and should be disregarded.
7. Continental Sales Enterprises, Inc. (formerly Armand, Inc.) had de facto dissolved prior to the merger.
8. Any conclusion of law deemed to be a finding of fact is found as a fact.
Conclusions of Law
1. This Court has jurisdiction over the parties and the subject matter of this action.
2. The inclusion of Continental Sales Enterprises, Inc. (formerly Armand, Inc.) in the merger will be disregarded and for tax purposes the merged entity will be treated as not including Continental Sales Enterprises, Inc. (formerly Armand, Inc.).
3. The deduction of the net operating loss accumulation of Continental Sales Enterprises, Inc. (then Armand, Inc.) from the income of the merged entity for the fiscal years ending September 30, 1957, 1958 and 1959 shall be disallowed and denied.
4. Any finding of fact deemed to be a matter of law is concluded as a matter of law.