Thatcher v. Commissioner
United States Tax Court
A partnership, using the cash receipts and disbursements method of accounting, transferred all of its assets and liabilities, including accounts receivable and accounts payable, to a newly formed corporation in exchange for all of the authorized stock of the corporation. Held: Under sec. 357(c), I.R.C. 1954, the excess of the liabilities assumed, including the accounts payable, by the corporation over the basis of the assets transferred is taxable.
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A partnership, using the cash receipts and disbursements method of accounting, transferred all of its assets and liabilities, including accounts receivable and accounts payable, to a newly formed corporation in exchange for all of the authorized stock of the corporation. Held: Under sec. 357(c), I.R.C. 1954, the excess of the liabilities assumed, including the accounts payable, by the corporation over the basis of the assets transferred is taxable. The basis of the stock acquired in the exchange is determined. Held, further, respondent's determination of reasonable compensation approved.
1Opinion of the Court
Simpson, Judge:
In these consolidated cases, the respondent determined the following deficiencies in the petitioners’ Federal income taxes:
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Concessions having been made by the parties, the issues remaining for decision are: (1) Whether the liabilities transferred to a corporation as a part of an exchange under section 351 of the Internal Revenue Code of 19542 exceeded the basis of the assets acquired by such corporation in such exchange so that section 357(c) is applicable; (2) what is the basis of the stock acquired by the transferor in such exchange; and (3) whether the…
2Cases cited13 opinions
- United States v. StewartSupreme Court of the United States · 1940
- Weiss v. StearnSupreme Court of the United States · 1924
- Nat Harrison Assoc., Inc. v. CommissionerUnited States Tax Court · 1964
- Paula Constr. Co. v. CommissionerUnited States Tax Court · 1972
- United States v. HendlerSupreme Court of the United States · 1938
8 more not listed; retrieve them via the Exa API.
3Cited by10 opinions
- Hempt Bros., Inc. v. United StatesCourt of Appeals for the Third Circuit · 1974
- Focht v. CommissionerUnited States Tax Court · 1977
- Rosen v. CommissionerUnited States Tax Court · 1974
- Wilford E. Thatcher v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1976
- Christopher v. CommissionerUnited States Tax Court · 1984
5 more not listed; retrieve them via the Exa API.