Douglas P. McLaulin, Jr. v. Commissioner

115 T.C. No. 18

UNITED STATES TAX COURT DOUGLAS P. MCLAULIN, JR., ET AL.,1 Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket Nos. 7832-98, 7833-98, Filed September 20, 2000. 7834-98. Ps’ "S corporation", A, owned 50 percent of the stock of corporation B, a "C corporation". B redeemed individual H’s 50-percent stock interest in B for cash and real property. On the previous day, B had borrowed from A an amount exceeding the cash consideration and representing over 96 percent of the total consideration paid to H for his stock. On the same day as the redemption, A distributed its…