Shinefeld v. Commissioner
United States Tax Court
Petitioner was the founder, president, and former sole shareholder of Multipane. He sold his Multipane shares to Gale. He owned a large block of Gale stock during the years in issue. Gale encountered cash difficulties and proposed a sale of Multipane's assets to WGL, another controlled corporation of Gale. Petitioner made loans to Gale in an effort to avert the sale and to ease Gale's financial troubles, both of which he believed would damage Multipane's business.
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Petitioner was the founder, president, and former sole shareholder of Multipane. He sold his Multipane shares to Gale. He owned a large block of Gale stock during the years in issue. Gale encountered cash difficulties and proposed a sale of Multipane's assets to WGL, another controlled corporation of Gale. Petitioner made loans to Gale in an effort to avert the sale and to ease Gale's financial troubles, both of which he believed would damage Multipane's business. These loans were subsequently discharged at less than face value, resulting in a loss. Held, petitioner's primary motive in making…
1Opinion of the Court
OPINION
On his 1970 income tax return, petitioner claimed a business bad debt deduction under section 166(a)(1)8 of $293,275, the amount of the loss he suffered on his loans to Gale. Respondent concedes the existence and the amount of the debts but contends that they should not be allowed on the ground that they constituted nonbusiness debts under section 166(d).9 The parties are in agreement that, in determining whether the debts bore a proximate relationship to petitioner’s trade or business, “the proper measure is that of dominant motivation.” United States v. Generes, 405 U.S. 93 (1972);…
2Cases cited11 opinions
- Deputy, Administratrix v. Du PontSupreme Court of the United States · 1940
- United States v. GeneresSupreme Court of the United States · 1972
- Primuth v. CommissionerUnited States Tax Court · 1970
- Smith v. CommissionerUnited States Tax Court · 1973
- A. H. Kelson and Nyla C. Kelson v. United StatesCourt of Appeals for the Tenth Circuit · 1974
6 more not listed; retrieve them via the Exa API.
3Cited by37 opinions
- Benak v. CommissionerUnited States Tax Court · 1981
- Scifo v. CommissionerUnited States Tax Court · 1977
- Eisenberg v. CommissionerUnited States Tax Court · 1982
- Harry Litwin v. United StatesCourt of Appeals for the Tenth Circuit · 1993
- La Staiti v. CommissionerUnited States Tax Court · 1980
32 more not listed; retrieve them via the Exa API.