Swan v. Commissioner
United States Tax Court
On August 17, 1955, petitioners received $ 39,800 from Swan, Inc., their wholly owned corporation, except for qualifying shares, which was designated as payment for the stock of Charles, Inc., which was also wholly owned by petitioners, except for qualifying shares.
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On August 17, 1955, petitioners received $ 39,800 from Swan, Inc., their wholly owned corporation, except for qualifying shares, which was designated as payment for the stock of Charles, Inc., which was also wholly owned by petitioners, except for qualifying shares. Over a period of years Swan, Inc., had made numerous loans to Charles, Inc. Held: Petitioners have failed to meet their burden of proving that what was in form a redemption under section 304, I.R.C. 1954, was in substance repayment of a loan to one of the petitioners, as alleged by them. The distribution of $ 39,800 to petitioners…
1Opinion of the Court
OPINION
Naum, Judge:
The Commissioner determined that “your receipt of $40,000.00 in cash from the Swan Construction Company in exchange for the stock of Charles Associates, Inc., constitutes a taxable dividend in accordance with the provisions of Section 301, 302, 304, 316 and 318 of the Internal Eevenue Code of 1954.” 1
There is no dispute between the parties that the purchase of petitioners’ Charles, Inc., stock by Swan, Inc., falls literally within the words of section 304 of the 1954 Code, so that the distribution by Swan, Inc., is to be treated as though it were redeeming its own stock.2…
2Cases cited11 opinions
- Flanagan v. HelveringCourt of Appeals for the D.C. Circuit · 1940
- Elizabeth N. B. Ferro v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 1957
- United States v. John H. FewellCourt of Appeals for the Fifth Circuit · 1958
- Heman v. CommissionerUnited States Tax Court · 1959
- Eva D. Bradbury v. Commissioner of Internal RevenueCourt of Appeals for the First Circuit · 1962
6 more not listed; retrieve them via the Exa API.
3Cited by7 opinions
- Commissioner of Internal Revenue v. John M. Stickney, of the Estate of Henry McK Haserot, and Bonnie C. HaserotCourt of Appeals for the Sixth Circuit · 1968
- Haserot v. CommissionerUnited States Tax Court · 1966
- J. A. Tobin Constr. Co. v. CommissionerUnited States Tax Court · 1985
- Charles Swan and Josephine Swan v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1966
- Haserot v. CommissionerUnited States Tax Court · 1966
2 more not listed; retrieve them via the Exa API.