Strake Trust v. Commissioner
United States Tax Court
Petitioners, as stockholders, purchased stock from the corporation for $ 35.52 per share less than the agreed fair market value thereof, pursuant to a directors' resolution, with the knowledge and consent of the other stockholders. Held, that under the facts herein the difference between the fair market value and the purchase price was in effect a distribution of corporate earnings and profits taxable as a dividend.
1Opinion of the Court
OPINION.
Arnold, Judge:
Each of these proceedings, consolidated for hearing and decision, involves'an income tax deficiency for 1939 of $2,-645.05. The question presented is whether $10,655 should be included in the income of each petitioner as a distribution of earnings and profits taxable as a dividend because they purchased stock from a corporation in which they were shareholders for $10,655 less than the fair market value thereof.
The facts were stipulated as follows:
I
Petitioners are irrevocable trust estates created by three instruments dated September 1, 1935, executed by George William…
2Cases cited2 opinions
- Manhattan General Equipment Co. v. Commissioner of Internal RevenueSupreme Court of the United States · 1936
- Palmer v. CommissionerSupreme Court of the United States · 1937
3Cited by20 opinions
- Riss v. CommissionerUnited States Tax Court · 1971
- Dellinger v. CommissionerUnited States Tax Court · 1959
- Stanley v. Waldheim v. Commissioner of Internal Revenue, Commissioner of Internal Revenue v. Helen W. BienenstokCourt of Appeals for the Seventh Circuit · 1957
- Haag v. CommissionerUnited States Tax Court · 1963
- Hearst Corp. v. CommissionerUnited States Tax Court · 1950
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