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Legal Ruling No. 012

June 26, 1958


As a matter of factual determination the liquidating activities of the subject corporation did not constitute doing business.

Previous to 1947 taxpayer liquidated all of its assets with the exception of cash and certain receivables.  Among the receivables were certain notes covering security sales contracts which were contingent upon the approval of reorganization plans of two railroads whose securities were involved.  These plans were approved in 1947 and 1948, whereupon taxpayer realized income on the notes.  Advice is requested as to whether the collection of contingent receivables in 1947 constituted "doing business".

In defining "doing business" the Bank and Corporation Tax Law specifies actively engaging in any transaction for profit.  In the instant case all that was to be done by taxpayer in connection with the transaction in question had been done prior to 1947.  The contract was contingent upon action of other corporations over which the taxpayer had no control, and the action of these other corporations in subsequent years fulfilled the contract.  This did not constitute actively engaging in a transaction on the part of the taxpayer in 1947.  Therefore, taxpayer was not doing business during 1947.

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