As used in section 269 and §§ 1.269-2 through 1.269-7:
(a) Allowance. The term allowance refers to anything in the internal revenue laws which has the effect of diminishing tax liability. The term includes, among other things, a deduction, a credit, an adjustment, an exemption, or an exclusion.
(b) Evasion or avoidance. The phrase evasion or avoidance is not limited to cases involving criminal penalties, or civil penalties for fraud.
(c) Control. The term control means the ownership of stock possessing at least 50 percent of the total combined voting power of all classes of stock entitled to vote, or at least 50 percent of the total value of shares of all classes of stock of the corporation. For control to be “acquired on or after October 8, 1940”, it is not necessary that all of such stock be acquired on or after October 8, 1940. Thus, if A, on October 7, 1940, and at all times thereafter, owns 40 percent of the stock of X Corporation and acquires on October 8, 1940, an additional 10 percent of such stock, an acquisition within the meaning of such phrase is made by A on October 8, 1940. Similarly, if B, on October 7, 1940, owns certain assets and transfers on October 8, 1940, such assets to a newly organized Y Corporation in exchange for all the stock of Y Corporation, an acquisition within the meaning of such phrase is made by B on October 8, 1940. If, under the facts stated in the preceding sentence, B is a corporation, all of whose stock is owned by Z Corporation, then an acquisition within the meaning of such phrase is also made by Z Corporation on October 8, 1940, as well as by the shareholders of Z Corporation taken as a group on such date, and by any of such shareholders if such shareholders as a group own 50 percent of the stock of Z on such date.
(d) Person. The term person includes an individual, a trust, an estate, a partnership, an association, a company or a corporation.
[T.D. 6595, 27 FR 3596, Apr. 14, 1962, as amended by T.D. 8388, 57 FR 345, Jan. 6, 1992]
Notes of Decisions
Cited in
7
cases, 1963–2012 · leading case:
Love v. Comm'r, 2012 T.C. Memo. 166 (Tax Ct. 2012).
Love v. Comm'r, 2012 T.C. Memo. 166 (Tax Ct. 2012).
· cites it 2× “OPINION Section 269(a) provides that if a taxpayer acquires control of the stock in a corporation and the principal purpose for the acquisition is the evasion or avoidance of income tax by securing *184 the benefit of a deduction, credit, or other allowance to which the taxpayer…”
Rocco, Inc. v. Comm'r, 72 T.C. 140 (Tax Ct. 1979).
· cites it 2× “14 *159 On its face, the scope of section 269(a) may be broad enough to preclude adoption of an accounting method by newly created subsidiaries if the requisite tax avoidance purpose is present. As stated in section 1.”
Canaveral Int'l Corp. v. Comm'r, 61 T.C. 520 (Tax Ct. 1974).
· cites it 2× “This subsection shall apply only with respect to acquisitions after March 1, 1954. 13. The term "allowance" refers "to anything in the internal revenue laws which has the effect of diminishing tax liability.”
S. Dredging Corp. v. Comm'r, 54 T.C. 705 (Tax Ct. 1970).
· cites it 2× “For purposes of paragraphs (1) and (2), control means the ownership *718 of stock possessing at least 50 percent of the total combined voting power of all classes of stock entitled to vote or at least 50 percent of the total value of shares of all classes of stock of the…”
Bickes-Wilbert Burial Vault Co. v. Comm'r, 51 T.C.M. 941 (Tax Ct. 1986).
· cites it 2× “Section 269(b)(2) [now section 269(c)(2) ] authorizes respondent to distribute, apportion or allocate such deductions, credits or allowances between corporations, and to allow such deductions, credits or allowances so distributed, apportioned or allocated, if respondent…”
Key Buick Co. v. Comm'r, 35 T.C.M. 1359 (Tax Ct. 1976).
· cites it 2× “The term "person" includes a corporation. Sec. 1.”
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