Abdalla v. Commissioner
United States Tax Court
Held: Petitioner is entitled to a deduction for his pro rata share of two subch. S corporations' net operating losses. Because petitioner's stock basis and basis of indebtedness became worthless as of Oct. 26, 1966, his share of such losses is computed for that part of the corporations' taxable year ending Oct. 25, 1966. Held, further, interest payments made in connection with a bad debt are colored thereby, giving rise to a sec. 166 bad debt loss.
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Held: Petitioner is entitled to a deduction for his pro rata share of two subch. S corporations' net operating losses. Because petitioner's stock basis and basis of indebtedness became worthless as of Oct. 26, 1966, his share of such losses is computed for that part of the corporations' taxable year ending Oct. 25, 1966. Held, further, interest payments made in connection with a bad debt are colored thereby, giving rise to a sec. 166 bad debt loss. Held, further, petitioner's basis for the purpose of computing gain realized on the liquidation of two other corporations is not increased due to…
1Opinion of the Court
Sterrett, Judge:
Respondent determined a deficiency in petitioners’ Federal income tax for the calendar year 1968 in the amount of $143,895.95. Due to concessions made by the parties, four issues remain for our determination: (1) Is shareholder petitioner entitled to a deduction for a portion of the net operating losses of the two subchapter S corporations as calculated at their year ended January 31,1967, to the extent of his stock basis and basis of indebtedness therein; (2) is petitioner entitled to a section 163 interest deduction in 1968 by reason of payments on two notes of a bankrupt…
2Cases cited17 opinions
- Markham v. CabellSupreme Court of the United States · 1946
- Boehm v. CommissionerSupreme Court of the United States · 1945
- Putnam v. CommissionerSupreme Court of the United States · 1956
- Arrowsmith v. CommissionerSupreme Court of the United States · 1952
- Rushing v. CommissionerUnited States Tax Court · 1972
12 more not listed; retrieve them via the Exa API.
3Cited by25 opinions
- Southern Pacific Transp. Co. v. CommissionerUnited States Tax Court · 1980
- Smith v. CommissionerUnited States Tax Court · 1985
- Jacob Abdalla and Mary T. Abdalla v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1981
- Exxon Corp. v. CommissionerUnited States Tax Court · 1994
- Coca-Cola Co. v. CommissionerUnited States Tax Court · 1996
20 more not listed; retrieve them via the Exa API.