Tollefsen v. Commissioner
United States Tax Court
T owned all the stock in A corporation. A corporation was in turn the sole shareholder of B corporation. B corporation sold for cash all its assets and manufacturing rights within the continental United States to a party unrelated to T and became inactive. Thereafter, T immediately began making cash withdrawals from B corporation which were evidenced by non-interest-bearing "notes."
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T owned all the stock in A corporation. A corporation was in turn the sole shareholder of B corporation. B corporation sold for cash all its assets and manufacturing rights within the continental United States to a party unrelated to T and became inactive. Thereafter, T immediately began making cash withdrawals from B corporation which were evidenced by non-interest-bearing "notes." Held, the net withdrawals from B corporation during the year in issue were not bona fide loans to T but, as a result of T's control over A and B corporations, were constructive dividends to T from A corporation.
1Opinion of the Court
OPINION
Raum, Judge:
The sole issue is whether the net withdrawals made by petitioner George E. Tollefsen from Tollefsen Manufacturing during 1961 constituted loans, as contended by the petitioners, or distributions of dividends, as contended by the Commissioner. Eesolution of this issue requires us to determine first whether Tollefsen’s withdrawals were intended as bona fide loans to him, or as permanent withdrawals. If the withdrawals were intended to be permanent, we must further determine whether petitioners received dividends notwithstanding they were not record owners of stock in…
2Cases cited13 opinions
- Automobile Club of Mich. v. CommissionerSupreme Court of the United States · 1957
- Dixon v. United StatesSupreme Court of the United States · 1965
- Caldwell v. Commissioner of Internal Revenue. Commissioner of Internal Revenue v. CaldwellCourt of Appeals for the Second Circuit · 1953
- Wiese v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1938
- Meyer v. CommissionerUnited States Board of Tax Appeals · 1941
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3Cited by3 opinions
- Brownholtz v. CommissionerUnited States Tax Court · 1978
- Brownholtz v. CommissionerUnited States Tax Court · 1978
- Tollefsen v. CommissionerUnited States Tax Court · 1969