American Nurseryman Publishing Co. v. Commissioner
United States Tax Court
In 1969, P made the election to be taxed as a small business corporation under subch. S, I.R.C. 1954. In 1975, K, a shareholder of P, transferred her stock in P to a revocable trust of which she was the sole trustee and sole beneficiary during her lifetime. After her death in 1976, an Illinois court found that the transfer was based on a mistake and held it to be void ab initio.
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In 1969, P made the election to be taxed as a small business corporation under subch. S, I.R.C. 1954. In 1975, K, a shareholder of P, transferred her stock in P to a revocable trust of which she was the sole trustee and sole beneficiary during her lifetime. After her death in 1976, an Illinois court found that the transfer was based on a mistake and held it to be void ab initio. Held: 1. The order of the Illinois court must be disregarded for Federal tax purposes. 2. The election by P was terminated since sec. 1.1371-1(e), Income Tax Regs., provides that such a trust cannot hold stock in an…
1Opinion of the Court
OPINION
Simpson, Judge:
The Commissioner determined a deficiency of $22,664.55 in the petitioner’s Federal income tax for 1975. The only issue to be decided is whether an election by the petitioner to be treated as a small business corporation under subchapter S of the Internal Revenue Code of 19541 was terminated when a shareholder transferred her stock to a revocable trust of which she was the trustee and sole beneficiary during her life and when such transfer was later held by an Illinois court to have been void ab initio.
All of the facts have been stipulated, and such facts are so found.
The…
2Cases cited40 opinions
- Commissioner v. South Texas Lumber Co.Supreme Court of the United States · 1948
- United States v. CorrellSupreme Court of the United States · 1967
- Bingler v. JohnsonSupreme Court of the United States · 1969
- Brewster v. GageSupreme Court of the United States · 1930
- Fawcus MacHine Co. v. United StatesSupreme Court of the United States · 1931
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3Cited by10 opinions
- Estate of La Meres v. Comm'rUnited States Tax Court · 1992
- Estate of Nicholson v. CommissionerUnited States Tax Court · 1990
- Estate of Bennett v. CommissionerUnited States Tax Court · 1993
- T.J. Henry Associates, Inc. v. CommissionerUnited States Tax Court · 1983
- American Nurseryman Publishing Co. v. CommissionerUnited States Tax Court · 1980
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