Martin Ice Cream Co. v. Comm'r
United States Tax Court
A and his son M were shareholders of MIC, an S corporation that distributed ice cream products to supermarket chains, independent grocery stores, and food service accounts. MIC's supermarket business was largely attributable to the close personal relationships that A had developed and maintained for decades, beginning before the creation of MIC in 1971, with the owners and managers of the supermarket chains.
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A and his son M were shareholders of MIC, an S corporation that distributed ice cream products to supermarket chains, independent grocery stores, and food service accounts. MIC's supermarket business was largely attributable to the close personal relationships that A had developed and maintained for decades, beginning before the creation of MIC in 1971, with the owners and managers of the supermarket chains. Since 1974, MIC had distributed the ice cream products of HD, pursuant to an oral agreement entered into between A and the founder of HD. In 1987 and 1988, following the acquisition of HD…
1Opinion of the Court
Beghe, Judge:
Respondent determined the following deficiency and additions to tax:
Additions to tax
Year Deficiency Sec. 6653(a)(1) Sec. 6661
1988 $477,816 $23,891 $119,454
In so doing, respondent determined that Martin Ice Cream Co. (MIC or petitioner) recognized taxable gain of $1,430,340 on the distribution of stock of its newly created subsidiary, Strassberg Ice Cream Distributors, Inc. (sic), to one of petitioner’s two shareholders, Arnold Strassberg (Arnold), in redemption of his 51-percent stock interest in petitioner. Shortly before trial, we granted respondent’s motion for leave to amend…
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