S. Tulsa Pathology Lab. v. Comm'r
United States Tax Court
P agreed to sell a portion of its business (clinical business) to N, a third party, pursuant to a prearranged sale that was structured as a spinoff.
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P agreed to sell a portion of its business (clinical business) to N, a third party, pursuant to a prearranged sale that was structured as a spinoff. P's basis in the clinical business's assets was $ 105,015. On Oct. 29, 1993, P transferred the clinical business to a newly incorporated entity, S, in exchange for all of S's stock, pursuant to sec. 368(a)(1)(D), I.R.C., and, on Oct. 30, 1993, P distributed the stock to P's shareholders in a transaction it claimed satisfied the requirements of sec. 355, I.R.C. On the same day as the distribution of S's stock to P's shareholders, S's shareholders…
1Opinion of the Court
Marvel, Judge:
Respondent determined a deficiency in petitioner’s Federal income tax of $1,926,232 for its taxable year ended June 30, 1994.
The issues for decision are: (1) Whether, pursuant to a plan of reorganization under section 368(a)(1)(D),1 petitioner’s distribution to its shareholders of stock of a controlled corporation qualified as a nontaxable distribution under section 355; and (2) if the distribution did not qualify as a nontaxable distribution under section 355, whether the fair market value of the distributed stock for purposes of calculating petitioner’s gain under section…
2Cases cited11 opinions
- United States v. CartwrightSupreme Court of the United States · 1973
- Marie H. Hamm v. Commissioner of Internal Revenue, William Hamm, Jr. v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1963
- Estate of Newhouse v. CommissionerUnited States Tax Court · 1990
- Estate of Cora R. Fitts, Deceased, J. Russel Fitts and Frank E. Tyler, Co-Executors v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1956
- Bd. of Regents, Etc. v. Natl. Collegiate Athletic Ass'nSupreme Court of Oklahoma · 1977
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3Cited by3 opinions
- David S. v. United StatesUnited States Court of Federal Claims · 2007
- S. Tulsa Pathology Lab. v. Comm'rUnited States Tax Court · 2002
- South Tulsa Pathology Laboratory, Inc. v. CommissionerUnited States Tax Court · 2002