Redding v. Commissioner
United States Tax Court
Petitioners were stockholders in Water Co. On Jan. 7, 1971, they received from Water Co. stock subscription rights, evidenced by transferable warrants, entitling them to purchase stock in Shorewood, a wholly owned subsidiary of Water Co., for less than its fair market value. The subscription period expired on Jan. 22, 1971, after which time the rights and warrants were totally worthless.
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Petitioners were stockholders in Water Co. On Jan. 7, 1971, they received from Water Co. stock subscription rights, evidenced by transferable warrants, entitling them to purchase stock in Shorewood, a wholly owned subsidiary of Water Co., for less than its fair market value. The subscription period expired on Jan. 22, 1971, after which time the rights and warrants were totally worthless. Petitioners exercised their rights during the subscription period, and after tendering their rights and the requisite cash consideration, on Feb. 2, 1971, the date of the stock distribution, received shares…
1Opinion of the Court
OPINION
Bruce, Judge:
Respondent determined deficiencies in the Federal income taxes of petitioners for the calendar year 1971 as follows:
Docket No. Petitioners Deficiency
5174-75 Gerald R. Redding and Dorothy M. Redding . 1$3,397.91
5176-75 Thomas W. Moses and Anne M. Moses . 10,665.39
These consolidated cases raise two significant and complex issues concerning the taxability of corporate distributions. The threshold question is whether petitioners received taxable dividend income as a result of either their receipt or exercise of rights issued to them by the Indianapolis Water Co. (Water Co.) to…
2Cases cited23 opinions
- Jack E. Golsen and Sylvia H. Golsen v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1971
- Helvering v. HallockSupreme Court of the United States · 1940
- Commissioner v. National Alfalfa Dehydrating & Milling Co.Supreme Court of the United States · 1974
- Helvering v. Alabama Asphaltic Limestone Co.Supreme Court of the United States · 1942
- Palmer v. CommissionerSupreme Court of the United States · 1937
18 more not listed; retrieve them via the Exa API.
3Cited by23 opinions
- Cal-Maine Foods, Inc. v. CommissionerUnited States Tax Court · 1989
- Penrod v. CommissionerUnited States Tax Court · 1987
- Gerald R. Redding and Dorothy M. Redding and Thomas W. Moses and Anne M. Moses v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1980
- Lesher v. CommissionerUnited States Tax Court · 1979
- McDonald's of Zion, 432, Ill., Inc. v. CommissionerUnited States Tax Court · 1981
18 more not listed; retrieve them via the Exa API.