Estate of Runnels v. Commissioner
United States Tax Court
1. Petitioners owed amounts to their wholly owned corporation substantially in proportion to their stockholdings. The corporation canceled their indebtedness and redeemed approximately prorata portions of their stock, effecting no basic change in ownership or control of the corporation. Held, the redemptions were essentially equivalent to dividends.
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1. Petitioners owed amounts to their wholly owned corporation substantially in proportion to their stockholdings. The corporation canceled their indebtedness and redeemed approximately prorata portions of their stock, effecting no basic change in ownership or control of the corporation. Held, the redemptions were essentially equivalent to dividends. United States v. Davis, 397 U.S. 301 (1970), followed. 2. Petitioner Lou Ella Runnels used an automobile owned and made available to her by the corporation. Held, respondent's determination of the amount of income realized by her from use of the…
1Opinion of the Court
OPINION
Feathersxon, Judge:
In these consolidated cases respondent determined deficiencies for 1964 in the income tax of the Estate of William F. Runnels, deceased, Lou Ella Runnels, executrix, in the amount of $11,206.18, and Lou Ella Runnels in the amount of $9,655.57.
The issues for decision are:(1) Whether cancellation of petitioners’ indebtedness to Runnels Chevrolet Co. in consideration of the redemption of part of its outstanding stock was essentially equivalent to a dividend under section 302(b)(1);1 and(2) Whether the amount of income realized by petitioner Lou Ella Runnels from use of…
2Cases cited11 opinions
- Challenge Mfg. Co. v. CommissionerUnited States Tax Court · 1962
- United States v. DavisSupreme Court of the United States · 1970
- Flanagan v. HelveringCourt of Appeals for the D.C. Circuit · 1940
- United States v. John H. FewellCourt of Appeals for the Fifth Circuit · 1958
- Dole v. CommissionerUnited States Tax Court · 1965
6 more not listed; retrieve them via the Exa API.
3Cited by23 opinions
- Benjamin v. CommissionerUnited States Tax Court · 1976
- Metzger Trust v. CommissionerUnited States Tax Court · 1981
- Melvin v. CommissionerUnited States Tax Court · 1987
- Fehrs Finance Co. v. CommissionerUnited States Tax Court · 1972
- Bennett v. CommissionerUnited States Tax Court · 1972
18 more not listed; retrieve them via the Exa API.