Crook v. Commissioner
United States Tax Court
Petitioners paid substantial amounts of "investment interest" subject to the limitation of sec. 163(d), I.R.C. 1954. Petitioners are also shareholders of three subch. S corporations each of which derives all its income from the operation of an automobile dealership. Petitioners were required to include in their individual gross income both actual distributions and undistributed taxable income of each corporation.
Read the full summary
Petitioners paid substantial amounts of "investment interest" subject to the limitation of sec. 163(d), I.R.C. 1954. Petitioners are also shareholders of three subch. S corporations each of which derives all its income from the operation of an automobile dealership. Petitioners were required to include in their individual gross income both actual distributions and undistributed taxable income of each corporation. Held, sec. 163(d)(4)(C), I.R.C. 1954, does not attribute the character of a subch. S corporation's operating income to its shareholders for purposes of the sec. 163(d) limitation.…
1Opinion of the Court
OPINION
Fay, Judge:
Respondent determined the following deficiencies in petitioners’ Federal income tax:
Year Deficiency1
1972 . $4,163.00
1973 . 1,316.30
1976 . 10,594.73
1977 . 180,567.00
After numerous concessions by petitioners, the only issue is whether certain income derived by petitioners as shareholders of three subchapter S corporations is "investment income” within the meaning of section 163(d)(3)(B),2 thereby allowing petitioners a greater investment interest expense deduction.
All the facts have been stipulated and are found accordingly.
Petitioners William H. Crook and Eleanor B. Crook…
2Cases cited7 opinions
- Moline Properties, Inc. v. CommissionerSupreme Court of the United States · 1943
- Helvering v. R. J. Reynolds Tobacco Co.Supreme Court of the United States · 1939
- United States v. One 1936 Model Ford V-8 De Luxe Coach, Commercial Credit Co.Supreme Court of the United States · 1939
- Evans v. GoreSupreme Court of the United States · 1920
- Howell v. CommissionerUnited States Tax Court · 1972
2 more not listed; retrieve them via the Exa API.
3Cited by8 opinions
- Flynn v. CommissionerUnited States Tax Court · 1989
- Tobler v. DerwinskiUnited States Court of Appeals for Veterans Claims · 1991
- Bumpus v. CommissionerUnited States Tax Court · 1999
- Crook v. CommissionerUnited States Tax Court · 1983
- Crook v. Commissioner Internal Revenue ServiceCourt of Appeals for the Fifth Circuit · 1984
3 more not listed; retrieve them via the Exa API.