Comess v. United States

MEMORANDUM OPINION

MaeKENZIE, District Judge.

Plaintiffs brought this action to challenge the Commissioner of Internal Revenue’s determination that they should have reported as taxable income a $5,-000.00 note that the plaintiff, Morris Comess, received in 1963 in exchange for preferred stock he held in Paramount Bedding Corporation (Paramount). At the time of the transaction in question, Morris Comess was Vice-President and an owner of twenty-five per cent (25%) of the common stock of Paramount. The government claims *1217that the $5,000.00 is taxable as a redemption essentially equivalent to a…