Packard v. Commissioner
United States Tax Court
Petitioners, then husband and wife, cash basis taxpayers, invested in a cattle-feeding program in late December 1971 through a subch. S corporation of which one of petitioners was the sole shareholder. Petitioners funded the investment in part with the proceeds of a bank recourse loan that was secured by a certificate of deposit purchased and pledged by the feed yard.
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Petitioners, then husband and wife, cash basis taxpayers, invested in a cattle-feeding program in late December 1971 through a subch. S corporation of which one of petitioners was the sole shareholder. Petitioners funded the investment in part with the proceeds of a bank recourse loan that was secured by a certificate of deposit purchased and pledged by the feed yard. The corporation prepaid and deducted feed expenses in 1971 although none of the feed was consumed in that year. In February 1972, a general partnership formed by petitioners purchased all of the stock of the corporation through…
1Opinion of the Court
Cohen, Judge:
In these consolidated cases, respondent determined deficiencies in Federal income tax of petitioners as follows:
Petitioner/docket No. Taxable year Amount
Sue B. Packard (a.k.a. 1971 $207,421.00
Virginia S. Wainwright) FYE 2/1/72 1157,282.24
Docket No. 23163-82 1972 226,724.00
1975 3,193.71
Richard A. Wainwright 1971 207,421.00
Docket No. 24088-82 1972 226,724.00
1975 10,766.19
After concessions, we must decide the correct tax treatment of petitioners’ investment in a cattle-feeding operation. Respondent claims that the total program was a sham, disputes the deductibility of a prepayment…
2Cases cited56 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
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- Gregory v. HelveringSupreme Court of the United States · 1935
- Commissioner v. Court Holding Co.Supreme Court of the United States · 1945
- Burnet v. HarmelSupreme Court of the United States · 1932
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3Cited by55 opinions
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