Hart v. Commissioner
United States Tax Court
T, an executive and stockholder of foreign corporation S, was forced to resign his position with S in June 1974. S's counsel thereafter devised a plan designed to (1) allow for the redemption of T's 200,000 zero-basis S shares (which represented 20 percent of S's outstanding shares) without subjecting T to the tax consequences of sec. 1248, I.R.C. 1954, and (2) impose on T a more secure noncompetition restriction than it was thought could be obtained by a simple covenant…
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T, an executive and stockholder of foreign corporation S, was forced to resign his position with S in June 1974. S's counsel thereafter devised a plan designed to (1) allow for the redemption of T's 200,000 zero-basis S shares (which represented 20 percent of S's outstanding shares) without subjecting T to the tax consequences of sec. 1248, I.R.C. 1954, and (2) impose on T a more secure noncompetition restriction than it was thought could be obtained by a simple covenant requiring enforcement under state law. In general, sec. 1248 taxes as a dividend gain on the sale of shares in a foreign…
1Opinion of the Court
DAVID E. HART and BARBARA A. HART, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Hart v. Commissioner
Docket No. 457-80.
United States Tax Court
T.C. Memo 1983-364; 1983 Tax Ct. Memo LEXIS 431; 46 T.C.M. (CCH) 530; T.C.M. (RIA) 83364;
June 20, 1983.
T, an executive and stockholder of foreign corporation S, was forced to resign his position with S in June 1974. S's counsel thereafter devised a plan designed to (1) allow for the redemption of T's 200,000 zero-basis S shares (which represented 20 percent of S's outstanding shares) without subjecting T to the tax consequences of sec.…
2Cases cited13 opinions
- North American Oil Consolidated v. BurnetSupreme Court of the United States · 1932
- Corliss v. BowersSupreme Court of the United States · 1930
- Commissioner v. MakranskyCourt of Appeals for the Third Circuit · 1963
- Professional Ins. Agents v. CommissionerUnited States Tax Court · 1982
- Harry Moore, Trustee v. United StatesCourt of Appeals for the Fifth Circuit · 1969
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