CIVIC CENTER FINANCE CO. v. KUHL, Collector of Internal Revenue, 177 F.2d 706

PER CURIAM. The taxpayer appeals from a judgment dismissing its suit to recover income and excess profits taxes for the year 1942. The controversy is over the proper basis to be used in determining the cost of a building which, according to the taxpayer’s contention, it acquired in 1936 pursuant to a plan of reorganization within the terms of Sec. 112(g) (1) (

B) and (

C) of the Revenue Act of 1936, as amended by the Act of 1939, 26 U.S.C.A. § 112. Accordingly, it contends, upon sale of the building in 1942, it was entitled to base' its cost for purposes of determining gain or loss upon the unadjusted basis in the hands of the transferor company. The District Court held, on the contrary, that the cost must be based upon the amount of liabilities actually assumed by the taxpayer as transferee of the property, and that upon that basis the taxpayer incurred a taxable gain upon the sale of the building in 1942, instead of the loss claimed by it.

The facts involved in the case and the reasons upon which the decision was based are well stated by Judge Duffy in his opinion, 83 F.Supp. 251. We are fully in accord with the views there expressed. Judgment affirmed.