Chisholm v. Commissioner
United States Board of Tax Appeals
Petitioners and others gave an option on corporate stock, and after receiving notice of the optionee's election to exercise it, petitioners, in order to escape tax on the profit on the sale, organized a partnership consisting only of themselves, to which they transferred title to their stock and then caused the partnership to transfer title to the purchaser and receive the proceeds.
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Petitioners and others gave an option on corporate stock, and after receiving notice of the optionee's election to exercise it, petitioners, in order to escape tax on the profit on the sale, organized a partnership consisting only of themselves, to which they transferred title to their stock and then caused the partnership to transfer title to the purchaser and receive the proceeds. Held, that the partnership was but a conduit for the passing of title for petitioners, who were the real vendors, and they are subject to tax on income computed on the basis of cost to them.
1Opinion of the Court
*1339OPINION.
Ap.undell:
It is alleged in each case that the respondent erred in determining that the sale of Houde Engineering Corporation *1340stock was made by the petitioner, when in truth and in fact the sale was made by the partnership of H. L. & Gr. H. Chisholm, and the purchase price was received by the partnership.
There is no question but that the sale of the stock was, in form, a sale by the partnership. On the date that the stock was transferred to the purchaser the certificate for the 600 shares was in the name of the partnership, the certificate was endorsed over to the purchaser by the…
2Cases cited13 opinions
- Lucas v. EarlSupreme Court of the United States · 1930
- United States v. PhellisSupreme Court of the United States · 1921
- United States v. IshamSupreme Court of the United States · 1873
- Bullen v. WisconsinSupreme Court of the United States · 1916
- Lucas v. North Texas Lumber Co.Supreme Court of the United States · 1930
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3Cited by11 opinions
- Lawrence B. Sheppard and Charlotte N. Sheppard v. The United StatesUnited States Court of Claims · 1966
- Apt v. BirminghamDistrict Court, N.D. Iowa · 1950
- Shoenberg v. CommissionerUnited States Board of Tax Appeals · 1934
- Countryside, L.P. v. Comm'rUnited States Tax Court · 2008
- Golden Nugget, Inc. v. CommissionerUnited States Tax Court · 1984
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