Cox v. Commissioner
United States Tax Court
In 1961, C & D corporation borrowed money from a bank in order to purchase two notes from Commonwealth corporation. S. E. Copple, controlling shareholder of both corporations, endorsed C & D's bank note. The two notes later became worthless. In 1966, at a time when C & D was insolvent, Commonwealth repurchased the notes and thereby enabled C & D to discharge its debt.
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In 1961, C & D corporation borrowed money from a bank in order to purchase two notes from Commonwealth corporation. S. E. Copple, controlling shareholder of both corporations, endorsed C & D's bank note. The two notes later became worthless. In 1966, at a time when C & D was insolvent, Commonwealth repurchased the notes and thereby enabled C & D to discharge its debt. Held, the amounts transferred from Commonwealth to C & D in 1966 constituted constructive dividends to S. E. Copple and are taxable as such under sec. 301(c)(1), I.R.C. 1954. Held, further, other petitioners who were…
1Opinion of the Court
Tirzah A. Cox, et al., 1 Petitioners v. Commissioner of Internal Revenue, Respondent
Cox v. Commissioner
Docket Nos. 4052-70, 4069-70, 4082-70
United States Tax Court
56 T.C. 1270; 1971 U.S. Tax Ct. LEXIS 60;
September 13, 1971, Filed
Decisions will be entered under Rule 50.
In 1961, C & D corporation borrowed money from a bank in order to purchase two notes from Commonwealth corporation. S. E. Copple, controlling shareholder of both corporations, endorsed C & D's bank note. The two notes later became worthless. In 1966, at a time when C & D was insolvent, Commonwealth repurchased the notes and…
2Cases cited19 opinions
- Wall v. United StatesCourt of Appeals for the Fourth Circuit · 1947
- Rushing v. CommissionerUnited States Tax Court · 1969
- W. B. Rushing v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1971
- Tauber v. CommissionerUnited States Tax Court · 1955
- Baird v. CommissionerUnited States Tax Court · 1955
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