Estate of Leavitt v. Commissioner
United States Tax Court
Ps were shareholders in V, an electing small business corporation under subch. S of the Internal Revenue Code. Ps guaranteed a loan issued by a bank to V. At the time the loan was made, V's liabilities exceeded its assets, and V was unable to meet its cash-flow requirements. The loan was issued by the bank only because of Ps' financial strength.
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Ps were shareholders in V, an electing small business corporation under subch. S of the Internal Revenue Code. Ps guaranteed a loan issued by a bank to V. At the time the loan was made, V's liabilities exceeded its assets, and V was unable to meet its cash-flow requirements. The loan was issued by the bank only because of Ps' financial strength. However, all payments of principal and interest on the loan were made by V. Held, absent an economic outlay by Ps, Ps' guarantees of the loan do not increase their basis in their stock in V. Brown v. Commissioner, 706 F.2d 755 (6th Cir. 1983), affg.…
1Opinion of the Court
Estate of Daniel Leavitt, Deceased, Charles D. Fox III, Executor, and Estate of Evelyn M. Leavitt, Deceased, Charles D. Fox III, Executor, et al., 1 Petitioners v. Commissioner of Internal Revenue, Respondent
Estate of Leavitt v. Commissioner
Docket Nos. 32041-84, 36453-84, 36454-84, 36455-84
United States Tax Court
90 T.C. 206; 1988 U.S. Tax Ct. LEXIS 19; 90 T.C. No. 16;
February 10, 1988; As amended February 18, 1988; As amended February 24, 1988 February 10, 1988, Filed
Decisions will be entered under Rule 155.
Ps were shareholders in V, an electing small business corporation under subch. S of…
Also in this document: Dissent.
2Cases cited58 opinions
- Jack E. Golsen and Sylvia H. Golsen v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1971
- Burnet v. HarmelSupreme Court of the United States · 1932
- John Kelley Co. v. CommissionerSupreme Court of the United States · 1946
- Putnam v. CommissionerSupreme Court of the United States · 1956
- Detroit Edison Co. v. CommissionerSupreme Court of the United States · 1943
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