Smith v. Commissioner
United States Tax Court
1. Petitioners were stockholder-creditors of an electing small business corporation. Their bases for the indebtedness had been reduced, but not to zero, by virtue of adjustments for corporate net operating losses. They received payments from the corporation in reduction of this indebtedness.
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1. Petitioners were stockholder-creditors of an electing small business corporation. Their bases for the indebtedness had been reduced, but not to zero, by virtue of adjustments for corporate net operating losses. They received payments from the corporation in reduction of this indebtedness. Held, each payment is allocable in part to return of basis and in part to income. 2. Held further, that where the corporation in an earlier year reported gain on a sale as capital gain, the exercise by the purchaser of an option to prepay the balance of the purchase price at a discount in a later year is…
1Opinion of the Court
Fat, Judge:
Respondent determined deficiencies in the Federal income tax of petitioners for the years 1962 and 1963 as follows:
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Various adjustments have been stipulated to by the parties, and an unrelated issue in docket No. 1307-66 was abandoned by petitioners at trial. The remaining issues for determination are:(1) Whether Joe M. Smith, Robert H. Anderson, and Henry V. Nielsen, shareholders in Smith-Nielsen Manufacturing Co., an electing small business corporation, must report as taxable income payments in reduction of indebtedness of the corporation to its shareholders. Their…
2Cases cited23 opinions
- Burnet v. LoganSupreme Court of the United States · 1931
- Arrowsmith v. CommissionerSupreme Court of the United States · 1952
- Hale v. HelveringCourt of Appeals for the D.C. Circuit · 1936
- Osenbach v. Commissioner of Internal RevenueCourt of Appeals for the Fourth Circuit · 1952
- Harold Wener v. Commissioner of Internal Revenue, Molly Wener v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1957
18 more not listed; retrieve them via the Exa API.
3Cited by14 opinions
- Borg v. CommissionerUnited States Tax Court · 1968
- Anderson v. CommissionerUnited States Tax Court · 1971
- Cornelius v. CommissionerUnited States Tax Court · 1972
- Cornelius v. CommissionerCourt of Appeals for the Fifth Circuit · 1974
- Joe M. Smith and Florence P. Smith v. Commissioner of Internal Revenue, Henry v. Nielsen and Margaret E. Nielsen v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1970
9 more not listed; retrieve them via the Exa API.