H & M Auto Electric, Inc. v. Commissioner
United States Tax Court
P, a corporation, distributed in complete redemption of a shareholder's interest pursuant to sec. 302(b)(3) a parcel of land and a note receivable. The distributee assumed a portion of a liability secured by the parcel distributed. The shareholder also assumed an unsecured liability. Held, in applying sec. 311(c), P must allocate liabilities to assets to determine if liability exceeds basis.
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P, a corporation, distributed in complete redemption of a shareholder's interest pursuant to sec. 302(b)(3) a parcel of land and a note receivable. The distributee assumed a portion of a liability secured by the parcel distributed. The shareholder also assumed an unsecured liability. Held, in applying sec. 311(c), P must allocate liabilities to assets to determine if liability exceeds basis. Held, further, a secured liability should be allocated to the asset which secures it and an unsecured liability should be allocated among all the properties distributed according to the relative fair…
1Opinion of the Court
H & M Auto Electric, Inc., Petitioner v. Commissioner of Internal Revenue, Respondent
H & M Auto Electric, Inc. v. Commissioner
Docket No. 20724-87
United States Tax Court
92 T.C. 1269; 1989 U.S. Tax Ct. LEXIS 88; 92 T.C. No. 84;
June 15, 1989; As corrected June 19, 1989 June 15, 1989, Filed
Decision will be entered under Rule 155.
P, a corporation, distributed in complete redemption of a shareholder's interest pursuant to sec. 302(b)(3) a parcel of land and a note receivable. The distributee assumed a portion of a liability secured by the parcel distributed. The shareholder also assumed an…
2Cases cited5 opinions
- C. D. Johnson Lumber Corp. v. CommissionerUnited States Tax Court · 1949
- Stern v. CommissionerUnited States Tax Court · 1976
- Bolles v. BoyerSupreme Court of Minnesota · 1919
- Waldref v. DowSupreme Court of Minnesota · 1927
- H & M Auto Electric, Inc. v. CommissionerUnited States Tax Court · 1989