Stinnett v. Commissioner
United States Tax Court
1. Held, non-interest-bearing notes issued to the stockholders of an electing small business corporation in exchange for their capital in the predecessor partnership, whether regarded as "debt" or as "equity," did not give rise to more than one class of stock within the meaning of sec. 1371(a), I.R.C. 1954. Regs. sec. 1.1371-1(g) invalidated. 2. Held, the leasehold term was for an indefinite period and leasehold improvements thereon must be depreciated over their useful life.
1Opinion of the Court
OPINION
Issue 1. Qualification under Section 1371 (a)
The corporation sustained losses during the years in question which were reflected in the individual income tax returns filed by the various petitioners on the assumption that the corporation was a “small business corporation” as defined in section 1371(a) and had made a valid election to be taxed in accordance with the provisions of subchap-ter S. The respondent has disallowed those deductions on the ground that the corporation was not a small business corporation as defined in section 1371 (a). That section provides:(a) Small Business…
2Cases cited10 opinions
- Gregory v. HelveringSupreme Court of the United States · 1935
- Fin Hay Realty Co. v. United StatesCourt of Appeals for the Third Circuit · 1968
- Laurie W. Tomlinson, District Director of Internal Revenue for the District of Florida v. The 1661 CorporationCourt of Appeals for the Fifth Circuit · 1967
- Ambassador Apartments, Inc. v. CommissionerUnited States Tax Court · 1968
- George T. Smith and Clela v. Smith v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1966
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3Cited by27 opinions
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- Bayley v. CommissionerUnited States Tax Court · 1977
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