Rojas v. Commissioner
United States Tax Court
D and E are the transferees and former majority shareholders of S, a corporation that had been engaged in the business of farming row crops. S adopted a plan of complete liquidation and pursuant to that plan, distributed to its majority shareholders all its operating assets, including certain harvested and unharvested crops.
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D and E are the transferees and former majority shareholders of S, a corporation that had been engaged in the business of farming row crops. S adopted a plan of complete liquidation and pursuant to that plan, distributed to its majority shareholders all its operating assets, including certain harvested and unharvested crops. Prior to the liquidation, S had deducted, pursuant to sec. 162(a), I.R.C. 1954, expenses incurred in connection with the cost of cultivating these crops. Held, the tax-benefit rule does not require S to include in income the expenses deducted for materials and services…
1DissentRuwe, J.
I agree with and join the dissenting opinions of Judges Nims and Hamblen and write this to add two brief observations.
The majority opinion appears to acknowledge that tax-benefit rule principles apply even though the expenditures and liquidation occurred in the same taxable year. In note 8, the majority concedes that the Supreme Court in Bliss Dairy found it of no consequence whether the application of these principles takes place by way of reducing or eliminating a deduction or increasing income. In light of this, I believe that the majority places unwarranted reliance upon section 464 and…
2Cases cited5 opinions
- Hillsboro National Bank v. CommissionerSupreme Court of the United States · 1983
- Beauchamp & Brown Groves Co. v. CommissionerUnited States Tax Court · 1965
- Beauchamp & Brown Groves Co. v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1967
- Marvin H. And Kathleen G. Teget v. United StatesCourt of Appeals for the Eighth Circuit · 1977
- Teget v. United StatesDistrict Court, D. South Dakota · 1976