Underwood v. Commissioner
United States Tax Court
Petitioners husband and wife, residing in a community property State, owned all the stock of corporation A, an electing small business corporation, and corporation L. A borrowed $ 110,000 from L. Subsequently, L canceled A's debt to it, Underwood gave his $ 110,000 note to L, and A gave its $ 110,000 note to Underwood.
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Petitioners husband and wife, residing in a community property State, owned all the stock of corporation A, an electing small business corporation, and corporation L. A borrowed $ 110,000 from L. Subsequently, L canceled A's debt to it, Underwood gave his $ 110,000 note to L, and A gave its $ 110,000 note to Underwood. Held, A's note to Underwood is not an "indebtedness" which increases Underwood's "adjusted basis" under sec. 1374(c)(2)(B), I.R.C. 1954, for the purpose of determining the amount of A's net operating loss petitioners may deduct for 1969. Held, further, a settlement of an income…
1Opinion of the Court
Featherston, Judge:
In these consolidated cases, respondent determined deficiencies in petitioners’ Federal income taxes for 1969 in the following amounts:
Petitioner Docket No. Deficiency
Morris G. Underwood_ 2882-73 $4,286.24
Jackie Underwood- 2883-73 4,302.42
The only issue for decision is whether petitioners, on their Federal income tax returns for 1969, properly deducted their respective shares of the net operating loss incurred by an electing small business corporation. The answer depends upon (1) whether the corporation’s execution of a promissory note to petitioners gave them an “adjusted…
2Cases cited12 opinions
- Putnam v. CommissionerSupreme Court of the United States · 1956
- Raynor v. CommissionerUnited States Tax Court · 1968
- Perry v. CommissionerUnited States Tax Court · 1966
- William H. Perry and Marian E. Perry v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1968
- Perry v. CommissionerUnited States Tax Court · 1970
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3Cited by73 opinions
- Crocker v. CommissionerUnited States Tax Court · 1989
- Estate of Emerson v. CommissionerUnited States Tax Court · 1977
- Norfolk Southern Corp. v. CommissionerUnited States Tax Court · 1995
- Estate of Leavitt v. CommissionerUnited States Tax Court · 1988
- Pike v. CommissionerUnited States Tax Court · 1982
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