Testor v. Commissioner
United States Tax Court
In 1955 petitioner transferred his sole proprietorship's assets and liabilities to his controlled corporation. The liabilities exceeded petitioner's adjusted basis in the transferred assets. Held, sec. 357(c) is applicable and petitioner is taxable on the excess of liabilities assumed by the corporation over petitioner's adjusted basis in the transferred property.
1Opinion of the Court
Fat, Judge:
Respondent determined deficiencies in the petitioner’s income tax for the calendar years 1955 and 1956 in the amounts of $120,088.61 and $1,635.59, respectively. The petitioner concedes the correctness of several of the respondent’s adjustments for 1955 and all of the respondent’s adjustments for 1956. The only issue remaining for decision is whether section 357(c) of the Internal Revenue Code of 1954 applies when the only liabilities assumed by the corporation in a section 351 transfer are open account liabilities.
FINDINGS OF FACT
All of the facts have been stipulated and are so…
2Cases cited1 opinion
- Kniffen v. CommissionerUnited States Tax Court · 1962
3Cited by16 opinions
- Smith v. CommissionerUnited States Tax Court · 1985
- Raich v. CommissionerUnited States Tax Court · 1966
- Alderman v. CommissionerUnited States Tax Court · 1971
- N. F. Testor v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1964
- Thatcher v. CommissionerUnited States Tax Court · 1973
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