Hitchon v. Commissioner
United States Tax Court
In a family corporation the father owned 1,509 shares of stock, and each of his three sons owned 1 share. The father transferred without consideration 1,508 of his 1,509 shares to the corporation, which were then held as treasury stock.
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In a family corporation the father owned 1,509 shares of stock, and each of his three sons owned 1 share. The father transferred without consideration 1,508 of his 1,509 shares to the corporation, which were then held as treasury stock. Held, that such transfer to the corporation constituted a gift by the father of a portion of his interest to each of his sons, decreasing his own interest to a one-fourth interest and increasing each son's interest to a one-fourth interest; and that under section 1015 of the Internal Revenue Code of 1954, the basis of the interest of each of the sons, for the…
1ConcurrenceTaNNEetwald, J.
Once, it is determined that a gift was intended, I would hold that such a transfer by a stockholder to a corporation is a gift to the other stockholders.1 Respondent’s own regulations confirm this principle. See Gift Tax Regs., sec. 25.2511-1 (h) (1). And Congress, in enacting the 1951 Code, similarly confirmed this principle in its discussion of a possible gift in connection with a transfer under section 351. S. Rept. No. 1622, to accompany H.R. 8300 (Pub. L. 591), 83d Cong., 2d Sess., p. 264 (1954) ; PI. Rept. No. 1337, to accompany PI.R. 8300 (Pub. L. 591), 83d Cong., 2d Sess., p. A-117…
2Cases cited3 opinions
- Stephen F. Heringer, Mabel H. Heringer, John F. Heringer, and Alta G. Heringer v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1956
- Thompson v. CommissionerUnited States Board of Tax Appeals · 1940
- Diebold v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 1952