Estate of Leavitt v. Commissioner
United States Tax Court
Ps were shareholders in V, an electing small business corporation under subch. S of the Internal Revenue Code. Ps guaranteed a loan issued by a bank to V. At the time the loan was made, V's liabilities exceeded its assets, and V was unable to meet its cash-flow requirements. The loan was issued by the bank only because of Ps' financial strength.
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Ps were shareholders in V, an electing small business corporation under subch. S of the Internal Revenue Code. Ps guaranteed a loan issued by a bank to V. At the time the loan was made, V's liabilities exceeded its assets, and V was unable to meet its cash-flow requirements. The loan was issued by the bank only because of Ps' financial strength. However, all payments of principal and interest on the loan were made by V. Held, absent an economic outlay by Ps, Ps' guarantees of the loan do not increase their basis in their stock in V. Brown v. Commissioner, 706 F.2d 755 (6th Cir. 1983), affg.…
1Opinion of the Court
OPINION
NIMS, Judge:
Respondent determined deficiencies in petitioners’ Federal income tax as follows:
Docket No. Tax year ended-Deficiency
32041-84 Dec. 31, 1979 $4,767.77
Dec. 31, 1980 1,577.06
36453-84 Dec. 31, 1979 3,031.29
Dec. 31, 1980 16,472.46
Dec. 31, 1981 13,919.88
36454-84 June 30, 1980 901.00
June 30, 1981 1,041.00
June 30, 1982 1,252.00
36455-84 Dec. 31, 1979 1,320.98
Dec. 31, 1980 1,495.88
Dec. 31, 1981 2,298.86
These cases were consolidated for trial, briefing, and opinion pursuant to Rule 141(a).2 After concessions and stipulations,3 the only issue for decision is whether a shareholder’s…
2Cases cited37 opinions
- John Kelley Co. v. CommissionerSupreme Court of the United States · 1946
- Putnam v. CommissionerSupreme Court of the United States · 1956
- Detroit Edison Co. v. CommissionerSupreme Court of the United States · 1943
- Fin Hay Realty Co. v. United StatesCourt of Appeals for the Third Circuit · 1968
- Estate of Travis Mixon, Jr. v. United StatesCourt of Appeals for the Fifth Circuit · 1972
32 more not listed; retrieve them via the Exa API.
3Cited by68 opinions
- Hitchins v. CommissionerUnited States Tax Court · 1994
- Rebecca Jo Reser v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1997
- Estate of Leavitt v. CommissionerCourt of Appeals for the Fourth Circuit · 1989
- J.H. Harris, and William J. Martin v. United StatesCourt of Appeals for the Fifth Circuit · 1990
- Calcutt v. CommissionerUnited States Tax Court · 1988
63 more not listed; retrieve them via the Exa API.