Focht v. Commissioner
United States Tax Court
Petitioner transferred all of the assets and liabilities of his sole proprietorship to a corporation in exchange for all the stock of such corporation. The sum of the liabilities assumed by the corporation exceeded the total adjusted basis of the proprietorship's assets transferred. Held, an obligation to the extent that its payment would have been deductible if made by petitioner shall not, for purposes of secs. 357 and 358, be treated as a liability.
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Petitioner transferred all of the assets and liabilities of his sole proprietorship to a corporation in exchange for all the stock of such corporation. The sum of the liabilities assumed by the corporation exceeded the total adjusted basis of the proprietorship's assets transferred. Held, an obligation to the extent that its payment would have been deductible if made by petitioner shall not, for purposes of secs. 357 and 358, be treated as a liability. Held, further, the amount of unreported rental income and various unsubstantiated deductions determined.
1Opinion of the Court
Sterrett, Judge:
Respondent determined a deficiency in petitioner’s Federal income tax for the calendar year 1970 in the amount of $22,699.
The issues presented for decision are: (1) Whether gain is recognized under section 357(c), I.R.C. 1954, upon the transfer by petitioner, in 1970, of the assets and liabilities of his sole proprietorship to his controlled corporation; (2) whether petitioner failed to include, for his 1970 taxable year, $2,094 of receipts as rental income; and (3) whether petitioner is entitled to various deductions in excess of the amounts allowed by respondent.
FINDINGS OF…
Also in this document: Concurrence.
2Cases cited18 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Jack E. Golsen and Sylvia H. Golsen v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1971
- Crane v. CommissionerSupreme Court of the United States · 1947
- Magruder v. SuppleeSupreme Court of the United States · 1942
- United States v. HendlerSupreme Court of the United States · 1938
13 more not listed; retrieve them via the Exa API.
3Cited by22 opinions
- Estate of Sachs v. CommissionerUnited States Tax Court · 1987
- Jacob Abdalla and Mary T. Abdalla v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1981
- Sol Lessinger and Edith Lessinger v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1989
- Carson v. CommissionerUnited States Tax Court · 1978
- Julio v. CommissionerUnited States Tax Court · 1977
17 more not listed; retrieve them via the Exa API.