Combrink v. Comm'r
United States Tax Court
P owned 100 percent of the stock in two corporations, C and L. During 1995 and 1996, C made a series of remittances totaling $ 89,728.73 which were treated as loans from C to P, followed by subsequent loans from P to L. P also lent additional funds to L. Thereafter, in late 1996, promissory notes payable by L to P in the amount of $ 252,481.03 were converted into a single promissory note of $ 77,481.03 and additional paid-in capital of $ 175,000.00. Then, in December of…
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P owned 100 percent of the stock in two corporations, C and L. During 1995 and 1996, C made a series of remittances totaling $ 89,728.73 which were treated as loans from C to P, followed by subsequent loans from P to L. P also lent additional funds to L. Thereafter, in late 1996, promissory notes payable by L to P in the amount of $ 252,481.03 were converted into a single promissory note of $ 77,481.03 and additional paid-in capital of $ 175,000.00. Then, in December of 1996, P transferred his shares in L to C in exchange for release from the $ 174,133.20 liability he had previously incurred…
1Opinion of the Court
GARY D. AND LINDY H. COMBRINK, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent *
Combrink v. Comm'r
No. 13580-99
United States Tax Court
117 T.C. 82; 2001 U.S. Tax Ct. LEXIS 57; 117 T.C. No. 8;
August 23, 2001, Filed
Petitioners entitled to section 304(b)(3)(B) exception to extent of $ 12,247.70, while $161,885.50 of transaction must be recast as redemption and taxed as dividend distribution.
P owned 100 percent of the stock in two corporations, C and
L. During 1995 and 1996, C made a series of remittances totaling
$ 89,728.73 which were treated as loans from C to P, followed by
subsequent…
2Cases cited6 opinions
- United States v. DavisSupreme Court of the United States · 1970
- Bhada v. CommissionerUnited States Tax Court · 1987
- Rohinton K. Bhada, Patricia A. Bhada v. Commissioner, Internal Revenue ServiceCourt of Appeals for the Sixth Circuit · 1989
- COMBRINK v. COMMISSIONER OF INTERNAL REVENUEUnited States Tax Court · 2001
- Combrink v. Comm'rUnited States Tax Court · 2001
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