James E. Caldwell & Co. v. Commissioner
United States Tax Court
1. Upon the incorporation of petitioner, its principal officer conveyed to it approximately 1,100 acres of real estate for shares of petitioner's stock; and such shares were then transferred to trusts for the benefit of the officer's family. Thereafter, a judgment creditor of the officer, finding him to be insolvent, filed a suit in equity to partially annul and rescind the conveyances, or in the alternative to recover the stock.
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1. Upon the incorporation of petitioner, its principal officer conveyed to it approximately 1,100 acres of real estate for shares of petitioner's stock; and such shares were then transferred to trusts for the benefit of the officer's family. Thereafter, a judgment creditor of the officer, finding him to be insolvent, filed a suit in equity to partially annul and rescind the conveyances, or in the alternative to recover the stock. Such suit was compromised and settled upon payment by petitioner to the officer's creditor of $ 50,000 plus $ 400.65 court costs. Held, that petitioner did not, by…
1Dissent
Bettce /.,
dissenting: Preliminarily I would like to point out, as was done by the.Supreme Court in Commissioner v. Wilcox, 327 U. S. 404, that “Moral turpitude is not a touchstone of taxability,” and that no “fall-out” from the “cloud” created by some of the questionable practices of petitioner’s officers should be allowed to permeate our thinking respecting the legal issues involved herein. I would also like to restate in more simple form the issues involved, as follows:
1. Whether the Commissioner correctly determined that petitioner could not capitalize the cost of settling a suit which…
2Cases cited19 opinions
- Helvering v. TaylorSupreme Court of the United States · 1935
- Commissioner v. HeiningerSupreme Court of the United States · 1943
- Burnet v. HoustonSupreme Court of the United States · 1931
- Miller v. Standard Nut Margarine Co. of Fla.Supreme Court of the United States · 1932
- Commissioner v. WilcoxSupreme Court of the United States · 1946
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