Baker Commodities, Inc. v. Commissioner
United States Tax Court
In 1961, three brothers transferred their partnership business, consisting of stock in four corporations and real estate, to a corporation owned partly by them and partly by seven employees of the partnership business.
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In 1961, three brothers transferred their partnership business, consisting of stock in four corporations and real estate, to a corporation owned partly by them and partly by seven employees of the partnership business. In consideration for the partnership assets thus acquired, the corporation assumed partnership indebtedness of $ 62,000 and issued a $ 3,150,000, 15-year promissory note to the partnership which required the corporation to make annual payments of interest and principal in the amounts of $ 80,000 and $ 200,000, respectively. Immediately after the transfer, the corporation…
1Opinion of the Court
Withet, Judge:
Eespondent determined deficiencies in petitioners’ income tax for the years and in the amounts as follows:
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The cases have been consolidated and will be decided together. Numerous issues raised by the pleadings have been disposed of by the parties, leaving the following issues to be decided:(1) Whether the promissory note in the amount of $3,150,000 given to the Jerome Bros, partnership by Baker Commodities, Inc., constituted a bona fide indebtedness, or was rather in the nature of preferred stock evidencing a risk capital investment by the partners.,(2) Whether…
2Cases cited25 opinions
- Gregory v. HelveringSupreme Court of the United States · 1935
- Malat v. RiddellSupreme Court of the United States · 1966
- Pinellas Ice & Cold Storage Co. v. CommissionerSupreme Court of the United States · 1933
- National Lead Co. v. United StatesSupreme Court of the United States · 1920
- Gooding Amusement Co. v. CommissionerUnited States Tax Court · 1954
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3Cited by50 opinions
- Dunn v. CommissionerUnited States Tax Court · 1978
- Foster v. Comm'rUnited States Tax Court · 1983
- Mennuto v. CommissionerUnited States Tax Court · 1971
- Georgia-Pacific Corp. v. CommissionerUnited States Tax Court · 1975
- Neubecker v. CommissionerUnited States Tax Court · 1975
45 more not listed; retrieve them via the Exa API.