Millar v. Commissioner
United States Tax Court
Amounts were paid into the capital of a subch. S corporation on behalf of petitioners, evidenced by nonrecourse notes and secured by their stock in the corporation. Petitioners deducted losses incurred by the corporation as stockholders, not to exceed their basis in the stock, including such advances. Ultimately, petitioners surrendered their stock in discharge of the notes. Held, the advances constituted loans, and not gifts, to the petitioners.
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Amounts were paid into the capital of a subch. S corporation on behalf of petitioners, evidenced by nonrecourse notes and secured by their stock in the corporation. Petitioners deducted losses incurred by the corporation as stockholders, not to exceed their basis in the stock, including such advances. Ultimately, petitioners surrendered their stock in discharge of the notes. Held, the advances constituted loans, and not gifts, to the petitioners. Further held, on surrender of the stock in payment of the notes, petitioners realized a gain to the extent that the face amount due on the notes…
1Opinion of the Court
SUPPLEMENTAL OPINION
Quealy, Judge:
In our opinion filed April 22, 1975 (T.C. Memo. 1975-113), the Court held that the basis of petitioners in the stock of Grant County Coal Corp., a subchapter S corporation, for purposes of determining the deductibility by its shareholders of losses sustained by the corporation, should include the sum of $500,000 contributed to the corporation on behalf of its shareholders by R. H. Jamisón, Jr., in the form of loans evidenced by nonrecourse notes in the amount of the respective contributions by each shareholder, payment of which was secured solely by a pledge…
2Cases cited12 opinions
- Crane v. CommissionerSupreme Court of the United States · 1947
- Helvering v. HammelSupreme Court of the United States · 1941
- Electro-Chemical Engraving Co. v. CommissionerSupreme Court of the United States · 1941
- Parker v. DelaneyCourt of Appeals for the First Circuit · 1950
- Lutz & Schramm Co. v. CommissionerUnited States Tax Court · 1943
7 more not listed; retrieve them via the Exa API.
3Cited by34 opinions
- Commissioner v. TuftsSupreme Court of the United States · 1983
- Freeland v. CommissionerUnited States Tax Court · 1980
- Estate of Delman v. CommissionerUnited States Tax Court · 1979
- Tufts v. CommissionerUnited States Tax Court · 1978
- Gershkowitz v. CommissionerUnited States Tax Court · 1987
29 more not listed; retrieve them via the Exa API.