Smith v. Commissioner
United States Tax Court
In 1968 the petitioner-husband acquired unregistered stock in exchange for his automobile service proprietorship. In 1969 he sold the stock and reported a long-term capital gain of $ 38,422. In 1971 a class action was brought against petitioner and others for alleged violations of sec. 12(1) of the Securities Act of 1933, 15 U.S.C. sec. 77l(1) (1970). The suit was settled and petitioner paid $ 5,000 in 1971 and $ 12,500 in 1972 to the plaintiffs' trust fund.
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In 1968 the petitioner-husband acquired unregistered stock in exchange for his automobile service proprietorship. In 1969 he sold the stock and reported a long-term capital gain of $ 38,422. In 1971 a class action was brought against petitioner and others for alleged violations of sec. 12(1) of the Securities Act of 1933, 15 U.S.C. sec. 77l(1) (1970). The suit was settled and petitioner paid $ 5,000 in 1971 and $ 12,500 in 1972 to the plaintiffs' trust fund. The amounts paid were deducted by petitioners as ordinary losses on their joint Federal income tax returns for the years in question.…
1Opinion of the Court
OPINION
Dawson, Chief Judge:
Respondent determined deficiencies in petitioners’ Federal income taxes for the calendar years 1971 and 1972 in the amounts of $912.36 and $2,195.68, respectively. The only issue presented for decision is whether payments made by petitioner to settle an action under section 12(1) of the Securities Act of 1933, 15 U.S.C. sec. 77l(1)(1970), are so directly related to a sale of unregistered stock in a prior tax year that the recognition of long-term capital gain on the sale during the prior tax year requires characterization of the payments as long-term capital losses…
2Cases cited9 opinions
- Arrowsmith v. CommissionerSupreme Court of the United States · 1952
- United States v. Skelly Oil Co.Supreme Court of the United States · 1969
- William L. Mitchell and Marian S. Mitchell v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1970
- James E. Anderson and Alice Anderson v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1973
- Anderson v. CommissionerUnited States Tax Court · 1971
4 more not listed; retrieve them via the Exa API.
3Cited by3 opinions
- Beaton v. CommissionerUnited States Tax Court · 1980
- Hintz v. CommissionerUnited States Tax Court · 1981
- Smith v. CommissionerUnited States Tax Court · 1976