Widener, Trust No. 5 v. Commissioner
United States Tax Court
Petitioner trust A was formed in 1915 by N. Petitioner trust B was formed in 1938 by N's son. In the taxable year in issue, both trusts had the same income beneficiary, but different contingent beneficiaries. To offset capital gains for the year in issue, trust A sold at a loss certain stocks to trust B, and trust B sold certain stocks at a loss to trust A. All sales were at market price and effectively transferred legal ownership of the shares involved.
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Petitioner trust A was formed in 1915 by N. Petitioner trust B was formed in 1938 by N's son. In the taxable year in issue, both trusts had the same income beneficiary, but different contingent beneficiaries. To offset capital gains for the year in issue, trust A sold at a loss certain stocks to trust B, and trust B sold certain stocks at a loss to trust A. All sales were at market price and effectively transferred legal ownership of the shares involved. Held, the sales in question were bona fide and the trusts' losses are therefore allowed. Sec. 1.267(c)-1, Income Tax Regs.
1Opinion of the Court
Joseph E. Widener, Trust No. 5, Provident National Bank, Trustee No. 56712, Petitioner v. Commissioner of Internal Revenue, Respondent; Peter A. B. Widener, Trust No. 5, Provident National Bank, Trustee No. 65972, Petitioner v. Commissioner of Internal Revenue, Respondent
Widener, Trust No. 5 v. Commissioner
Docket Nos. 2689-78, 2690-78
United States Tax Court
80 T.C. 304; 1983 U.S. Tax Ct. LEXIS 121; 80 T.C. No. 8;
January 31, 1983, Filed
Decisions will be entered for the petitioners.
Petitioner trust A was formed in 1915 by N. Petitioner trust B was formed in 1938 by N's son. In the taxable year…
2Cases cited14 opinions
- Gregory v. HelveringSupreme Court of the United States · 1935
- Higgins v. SmithSupreme Court of the United States · 1940
- Helvering v. GregoryCourt of Appeals for the Second Circuit · 1934
- United States v. FlannerySupreme Court of the United States · 1925
- Crown Cork International Corp. v. CommissionerUnited States Tax Court · 1944
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