Hutton v. Commissioner
United States Tax Court
Petitioner transferred all the assets of a sole proprietorship to a controlled corporation pursuant to sec. 351, I.R.C. 1954. As of the date of transfer, the proprietorship had a balance in its reserves for bad debts. Held, petitioners were not allowed a deduction for an addition to the reserves immediately before the transfer because sec. 1.166-4, Income Tax Regs., specifies that additions are to be made only at the end of the taxable year.
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Petitioner transferred all the assets of a sole proprietorship to a controlled corporation pursuant to sec. 351, I.R.C. 1954. As of the date of transfer, the proprietorship had a balance in its reserves for bad debts. Held, petitioners were not allowed a deduction for an addition to the reserves immediately before the transfer because sec. 1.166-4, Income Tax Regs., specifies that additions are to be made only at the end of the taxable year. Held, further, petitioners were required to report the remaining unabsorbed balance as taxable income in the year of the transfer since, by virtue of the…
1Opinion of the Court
Robert P. and Marguerite C. Hutton, Petitioners v. Commissioner of Internal Revenue, Respondent
Hutton v. Commissioner
Docket No. 1990-68
United States Tax Court
53 T.C. 37; 1969 U.S. Tax Ct. LEXIS 43;
October 13, 1969, Filed
Decision will be entered for the respondent.
Petitioner transferred all the assets of a sole proprietorship to a controlled corporation pursuant to sec. 351, I.R.C. 1954. As of the date of transfer, the proprietorship had a balance in its reserves for bad debts. Held, petitioners were not allowed a deduction for an addition to the reserves immediately before the transfer…
2Cases cited7 opinions
- Geyer, Cornell & Newell, Inc. v. CommissionerUnited States Tax Court · 1946
- Bird Management, Inc. v. CommissionerUnited States Tax Court · 1967
- J. E. Hawes Corp. v. CommissionerUnited States Tax Court · 1965
- Estate of Heinz Schmidt, Deceased, and Charlotte Schmidt v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1966
- Schmidt v. CommissionerUnited States Tax Court · 1964
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