Atwell v. Commissioner
United States Tax Court
1. Income -- Realization -- Benefit -- Reduction of Indebtedness. -- The purchasers of the stock and a note of an insolvent corporation did not realize income from the transfer by the corporation, after the sale, of its cash to the seller to be credited on the note, since the intention of both buyers and seller was that the subject of the sale would be the stock and the amount of the note less the cash. 2. Income -- Realization -- Basis -- Allocation of Cost -- Undivided…
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1. Income -- Realization -- Benefit -- Reduction of Indebtedness. -- The purchasers of the stock and a note of an insolvent corporation did not realize income from the transfer by the corporation, after the sale, of its cash to the seller to be credited on the note, since the intention of both buyers and seller was that the subject of the sale would be the stock and the amount of the note less the cash. 2. Income -- Realization -- Basis -- Allocation of Cost -- Undivided Interests in Overdue Notes. -- Purchasers of an insolvent corporation's overdue note for less than its face value were each…
1Opinion of the Court
OPINION.
MtjRdock, Judge:
The Commissioner claims an increased deficiency upon the ground that the $160,000 was income to the petitioners since it was paid under the amended purchase agreement by Texas to American on behalf of the petitioners and the other purchasers of the Texas stock. He has the burden of proof on this issue. The purchase price was $711,000, not $871,000. The evidence shows clearly that the purchasers never intended to purchase a note having a larger amount of principal due on it than $2,040,000 and it was the understanding throughout that the cash of $160,000 shown on the…
2Cases cited2 opinions
- Burnet v. LoganSupreme Court of the United States · 1931
- Duffin v. LucasCourt of Appeals for the Sixth Circuit · 1932
3Cited by14 opinions
- United Mercantile Agencies, Inc. v. CommissionerUnited States Tax Court · 1955
- Liftin v. CommissionerUnited States Tax Court · 1961
- Drybrough v. CommissionerUnited States Tax Court · 1964
- Cottage Sav. Asso. v. CommissionerUnited States Tax Court · 1988
- Drybrough v. CommissionerUnited States Tax Court · 1966
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