Hill v. Commissioner
United States Tax Court
Petitioners invested in a small business corporation, in stock, loans, and by guaranty of its debt. The corporation became insolvent. The directors authorized an issue of "Section 1244 stock." Petitioners "bought" such stock in amounts sufficient to repay their individual loans and the corporation's debt they had guaranteed, on Dec. 21, 1962, at $ 2.50 per share and sold it on Dec. 28 and Dec. 30, 1962, for one-tenth of a cent per share.
Read the full summary
Petitioners invested in a small business corporation, in stock, loans, and by guaranty of its debt. The corporation became insolvent. The directors authorized an issue of "Section 1244 stock." Petitioners "bought" such stock in amounts sufficient to repay their individual loans and the corporation's debt they had guaranteed, on Dec. 21, 1962, at $ 2.50 per share and sold it on Dec. 28 and Dec. 30, 1962, for one-tenth of a cent per share. They claimed losses upon such stock as ordinary losses. Held: 1. Petitioners sustained no losses in connection with the "Section 1244 stock," following…
1Opinion of the Court
Bruce, Judge:
Respondent determined deficiencies in income tax of the petitioners for the years and in the amounts shown below. In the answers to the petitions, respondent claimed increased deficiencies as shown.
[[Image here]]
The cases were consolidated because of common issues involving investments in a small business corporation. The principal issue is whether the petitioners are entitled to deductions as ordinary losses for amounts purportedly paid for stock issued as “Section 1244 stock” by the corporation. If not entitled to such deductions, the further issue involved is whether any…
2Cases cited5 opinions
- Knetsch v. United StatesSupreme Court of the United States · 1960
- Putnam v. CommissionerSupreme Court of the United States · 1956
- Morgan v. CommissionerUnited States Tax Court · 1966
- Hollenbeck v. CommissionerUnited States Tax Court · 1968
- Bruce v. United StatesDistrict Court, S.D. Texas · 1967
3Cited by13 opinions
- Smyers v. CommissionerUnited States Tax Court · 1971
- Kaplan v. CommissionerUnited States Tax Court · 1972
- Webb v. United StatesDistrict Court, S.D. Mississippi · 1982
- Brown v. CommissionerUnited States Tax Court · 1979
- Eger v. CommissionerUnited States Tax Court · 1969
8 more not listed; retrieve them via the Exa API.