Duncan Industries, Inc., etc. v. Commissioner
United States Tax Court
Petitioner borrowed $ 100,000 from Dycap, Inc., a small business investment corporation. Under the loan agreement, petitioner was to pay a variable rate of interest pegged to the prime interest rate being charged by a New York bank, $ 3,000 in points, and agreed to sell Dycap a 20-percent equity interest in petitioner for $ 500. The 20-percent equity interest involved 24,050 shares of petitioner's $ 1 par value stock for which Dycap paid about $ 0.02 per share.
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Petitioner borrowed $ 100,000 from Dycap, Inc., a small business investment corporation. Under the loan agreement, petitioner was to pay a variable rate of interest pegged to the prime interest rate being charged by a New York bank, $ 3,000 in points, and agreed to sell Dycap a 20-percent equity interest in petitioner for $ 500. The 20-percent equity interest involved 24,050 shares of petitioner's $ 1 par value stock for which Dycap paid about $ 0.02 per share. At about the time the agreement was executed, the book value of petitioner's stock was in excess of its $ 1 par value, and petitioner…
1Opinion of the Court
Duncan Industries, Inc. (Successor in Interest to Marblcast, Inc.), Petitioner v. Commissioner of Internal Revenue, Respondent
Duncan Industries, Inc., etc. v. Commissioner
Docket No. 6412-77
United States Tax Court
73 T.C. 266; 1979 U.S. Tax Ct. LEXIS 23;
November 15, 1979, Filed
Decision will be entered under Rule 155.
Petitioner borrowed $ 100,000 from Dycap, Inc., a small business investment corporation. Under the loan agreement, petitioner was to pay a variable rate of interest pegged to the prime interest rate being charged by a New York bank, $ 3,000 in points, and agreed to sell Dycap a…
2Cases cited40 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- United States v. CartwrightSupreme Court of the United States · 1973
- Palmer v. CommissionerSupreme Court of the United States · 1937
- Marie H. Hamm v. Commissioner of Internal Revenue, William Hamm, Jr. v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1963
- Palmer v. CommissionerUnited States Tax Court · 1974
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