PHILADELPHIA PARK AMUSEMENT CO. V. U.S.
126 F.Supp. 184 (1954)
NATURE OF THE CASE: This was a dispute over the basis of property on a taxable transfer.
Philadelphia (P) sued to recover overpaid income taxes resulting from P's claim that it was
entitled to depreciate the cost of a franchise obtained through the exchange of a bridge,
using as the basis for the franchise as the undepreciated cost of the bridge.
FACTS: In 1889 P got a 50-year franchise to operate a railway system in Philadelphia. P
then built a bridge over the Schuylkill River at a cost of $381,000. In 1934, it deeded the
bridge to the city in exchange for a ten-year extension of its franchise. The extended
franchise was abandoned in 1946 with three years left to run on it. A dispute erupted over
the basis for the ten-year extension. P asserted depreciation deductions based on the cost
of the extension and a loss upon abandonment of the franchise. D contends that the bridge
was either worthless or not exchanged for the 10-year extension.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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