Hicks Nurseries, Inc. v. Commissioner
United States Tax Court
The shareholders of a corporation wished to have the corporation elect under sec. 1372, I.R.C. 1954, to be treated as a small business corporation. In order to meet the 10-shareholder requirement of sec. 1371, I.R.C. 1954, H and W, who each owned stock individually, each transferred 1 share of the stock into joint ownership with the other spouse. Held, in accordance with sec. 1.1371-1(d)(2), Income Tax Regs., H and W are treated as a single shareholder.
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The shareholders of a corporation wished to have the corporation elect under sec. 1372, I.R.C. 1954, to be treated as a small business corporation. In order to meet the 10-shareholder requirement of sec. 1371, I.R.C. 1954, H and W, who each owned stock individually, each transferred 1 share of the stock into joint ownership with the other spouse. Held, in accordance with sec. 1.1371-1(d)(2), Income Tax Regs., H and W are treated as a single shareholder. Held, further, merely because the validity of the election was being litigated before the Tax Court was not an adequate reason for the…
1Opinion of the Court
OPINION
Simpson, Judge:
The respondent determined the following defi-ciences in the petitionerAFederal income taxes:
Taxable year Deficiency Taxable year Deficiency
1964 -$39, 761.11 1966 _$91, 514. 67
1965 - 60, 739.36 1967 _ 61, 319.15
The main, issue which we must decide is whether a husband and wife, who each owned stock in a corporation individually and who owned other stock hi the corporation jointly, are to be treated as 1 or 2 shareholders for purposes of the 10-shareholder requirement of section 1371 (a)(1) of the Internal Kevenue Code of 1954.1 If we decide that the election was valid,…
2Cases cited11 opinions
- Haggar Co. v. Helvering, Com'r of Internal RevenueSupreme Court of the United States · 1940
- Zellerbach Paper Co. v. HelveringSupreme Court of the United States · 1934
- Ben Perlmutter and Bernice Perlmutter v. Commissioner of Internal Revenue, the Perlmutters, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1967
- Perlmutter v. CommissionerUnited States Tax Court · 1965
- J. C. Penney Company, Transferee v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1962
6 more not listed; retrieve them via the Exa API.
3Cited by9 opinions
- Estate of Gardner v. CommissionerUnited States Tax Court · 1984
- Derksen v. CommissionerUnited States Tax Court · 1985
- Manson Western Corp. v. CommissionerUnited States Tax Court · 1981
- Hicks Nurseries, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1975
- Derksen v. CommissionerUnited States Tax Court · 1985
4 more not listed; retrieve them via the Exa API.