Wood v. Commissioner
United States Tax Court
P contributed three third-party promissory notes to his defined benefit pension plan in order to meet P's funding obligation as calculated by his actuary. The provisions of the plan did not require cash contributions. Held, P's contribution of the third-party promissory notes to the plan was not a "sale or exchange" or a prohibited transaction within the meaning of sec. 4975(c), I.R.C., and is not subject to the excise tax imposed by sec. 4975(a) and (b).
1Opinion of the Court
COHEN, Judge:
Respondent determined that petitioner is liable for excise taxes under section 4975(a) in the amount of $3,000 for 1984, $5,700 for 1985, and $5,700 for 1986. Respondent also determined that petitioner is liable for additions to tax under section 6651(a)(1) for failure to file excise tax returns, but respondent has now conceded the additions to tax.
The issue for decision is whether contribution of property to a defined benefit pension plan in order to satisfy the employer’s funding obligation is a prohibited transaction, i.e., a “sale or exchange,” within the meaning of section…
2Cases cited15 opinions
- Commissioner v. AckerSupreme Court of the United States · 1959
- United States v. ChaseSupreme Court of the United States · 1890
- Don E. Williams Co. v. CommissionerSupreme Court of the United States · 1977
- Al Nieto, Clarence Valdez, Adrian Munenmann, Lester Olivera and Joana L. Gonzales v. Louis Ecker, and Roger FrommerCourt of Appeals for the Ninth Circuit · 1988
- Woods v. CommissionerUnited States Tax Court · 1988
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3Cited by11 opinions
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- Keystone Consolidated Industries, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1992
- Commissioner v. Keystone Consolidated Industries, Inc.Supreme Court of the United States · 1993
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