Reddy v. Commissioner
United States Tax Court
Petitioners conditioned their preincorporation subscriptions for stock on the prospective corporation's adoption of a plan meeting the requirements of sec. 1244. Held: The stock subscribed for did not issue until the plan was adopted. Accordingly, petitioners are entitled to ordinary loss treatment under sec. 1244 when the stock became worthless during the year in issue.
1Opinion of the Court
Fay, Judge:
Respondent determined a deficiency of $1,630 in petitioners’ Federal income tax for 1970. We are to decide whether certain stock which became worthless during that year was issued in accordance with the requirements of section 12441 so as to entitle petitioners to ordinary loss treatment under that section.
FINDINGS OF FACT
Certain facts were stipulated by the parties.
Petitioners John J. and Margaret C. Reddy are husband and wife who filed their joint Federal income tax return for the year in issue at Denver, Colo. They resided in Denver, Colo., at the time their petition was filed…
2Cases cited2 opinions
- Morgan v. CommissionerUnited States Tax Court · 1966
- Hayden v. CommissionerUnited States Tax Court · 1969
3Cited by4 opinions
- Gilboy v. CommissionerUnited States Tax Court · 1978
- Bonacci v. CommissionerUnited States Tax Court · 1977
- Denemark v. CommissionerUnited States Tax Court · 1976
- Reddy v. CommissionerUnited States Tax Court · 1976