Millar v. Commissioner
United States Tax Court
Amounts were paid into the capital of a subch. S corporation on behalf of petitioners, evidenced by nonrecourse notes and secured by their stock in the corporation. Petitioners deducted losses incurred by the corporation as stockholders, not to exceed their basis in the stock, including such advances. Ultimately, petitioners surrendered their stock in discharge of the notes. Held, the advances constituted loans, and not gifts, to the petitioners.
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Amounts were paid into the capital of a subch. S corporation on behalf of petitioners, evidenced by nonrecourse notes and secured by their stock in the corporation. Petitioners deducted losses incurred by the corporation as stockholders, not to exceed their basis in the stock, including such advances. Ultimately, petitioners surrendered their stock in discharge of the notes. Held, the advances constituted loans, and not gifts, to the petitioners. Further held, on surrender of the stock in payment of the notes, petitioners realized a gain to the extent that the face amount due on the notes…
1Opinion of the Court
Gavin S. Millar, et al., 1 Petitioners v. Commissioner of Internal Revenue, Respondent
Millar v. Commissioner
Docket Nos. 5884-72, 5885-72, 5888-72, 5889-72, 5892-72, 5893-72
United States Tax Court
67 T.C. 656; 1977 U.S. Tax Ct. LEXIS 170;
January 10, 1977, Filed
Amounts were paid into the capital of a subch. S corporation on behalf of petitioners, evidenced by nonrecourse notes and secured by their stock in the corporation. Petitioners deducted losses incurred by the corporation as stockholders, not to exceed their basis in the stock, including such advances. Ultimately, petitioners surrendered…
Also in this document: Concurrence.
2Cases cited14 opinions
- Crane v. CommissionerSupreme Court of the United States · 1947
- Helvering v. HammelSupreme Court of the United States · 1941
- Electro-Chemical Engraving Co. v. CommissionerSupreme Court of the United States · 1941
- Parker v. DelaneyCourt of Appeals for the First Circuit · 1950
- Lutz & Schramm Co. v. CommissionerUnited States Tax Court · 1943
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