Court Opinion

ID: 9442343
Source: CourtListenerOpinion
Date Created: 2023-08-03 18:44:29.403815+00
Date Added: 2024-06-11T17:29:04.099181
License: Public Domain

RIDDICK, Circuit Judge,
dissenting.
I can not avoid the conclusion that the decision of the Tax Court ought to be affirmed. Whether during the taxable years the City held the equitable or even the legal title to the bridge is not, in my opinion, important. Throughout these years the taxpayer had, to the exclusion of the City and all others, the right to possess, control, and operate the bridge, to receive the income from its operation, and to apply the net income to the payment of its debts. Without the expectation of profit from the posses*65sion and operation of the bridge, the taxpayer would never have been organized. Without the receipt of profit by the taxpayer from the operation and control of the bridge, the plan to transfer title and possession to the City would have failed. To receive and apply for its benefit the net profit from the bridge operation was the purpose for which the taxpayer was organized. The fact that the City eventually comes into full possession and control of the bridge merely shows that the purpose for which taxpayer was created was realized. That the City was an intended and eventual beneficiary of the taxpayer’s successful operation does not show that the income earned by the taxpayer during its operation was the income of the City. Other intended and ultimate beneficiaries of the plan were doubtless the stockholders of the original corporation which owned the bridge before its transfer to the taxpayer. For purposes of taxation the taxpayer was the direct and taxable beneficiary of the net income derived from the business it was organized to conduct.