Edwards v. Commissioner
United States Tax Court
Basis for Determining Gain or Loss. -- Petitioner purchased stock from A; petitioner borrowed money to pay for this stock from B and deposited the stock as collateral to secure the indebtedness. Prior to the discharge of the indebtedness, by payment on the notes and by substitution of other security, petitioner repossessed the original stock. Subsequently and in a separate transaction, petitioner compromised the indebtedness.
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Basis for Determining Gain or Loss. -- Petitioner purchased stock from A; petitioner borrowed money to pay for this stock from B and deposited the stock as collateral to secure the indebtedness. Prior to the discharge of the indebtedness, by payment on the notes and by substitution of other security, petitioner repossessed the original stock. Subsequently and in a separate transaction, petitioner compromised the indebtedness. Seven months later, in another, separate, transaction, the original stock was sold to C. Held, the basis of the stock for the computation of gain or loss was the cost of…
1Opinion of the Court
OPINION.
Johnson, Judge:
Respondent has determined a deficiency of $353,-663.46 in petitioners’ income tax for the calendar year 1944.
The sole issue before us is whether the compromise of an indebtedness, evidenced by two notes, resulted in a reduction of basis of common stock; the stock was originally deposited as collateral security, later withdrawn, and after the compromise sold. Respondent made certain other adjustments to the petitioners’ net income, but these adjustments are not contested.
All of the facts were stipulated and are so found.
The petitioners are husband and wife, with their…
2Cases cited8 opinions
- Crane v. CommissionerSupreme Court of the United States · 1947
- Detroit Edison Co. v. CommissionerSupreme Court of the United States · 1943
- Hirsch v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1940
- Denman Tire & Rubber Co. v. CommissionerUnited States Tax Court · 1950
- Gehring Publishing Co. v. CommissionerUnited States Tax Court · 1942
3 more not listed; retrieve them via the Exa API.
3Cited by17 opinions
- Bixby v. CommissionerUnited States Tax Court · 1972
- Southern Pacific Transp. Co. v. CommissionerUnited States Tax Court · 1980
- Lemmen v. CommissionerUnited States Tax Court · 1981
- Crown v. CommissionerUnited States Tax Court · 1981
- Columbus & G. R. Co. v. CommissionerUnited States Tax Court · 1964
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