Cox v. Commissioner
United States Tax Court
In 1961, C & D corporation borrowed money from a bank in order to purchase two notes from Commonwealth corporation. S. E. Copple, controlling shareholder of both corporations, endorsed C & D's bank note. The two notes later became worthless. In 1966, at a time when C & D was insolvent, Commonwealth repurchased the notes and thereby enabled C & D to discharge its debt.
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In 1961, C & D corporation borrowed money from a bank in order to purchase two notes from Commonwealth corporation. S. E. Copple, controlling shareholder of both corporations, endorsed C & D's bank note. The two notes later became worthless. In 1966, at a time when C & D was insolvent, Commonwealth repurchased the notes and thereby enabled C & D to discharge its debt. Held, the amounts transferred from Commonwealth to C & D in 1966 constituted constructive dividends to S. E. Copple and are taxable as such under sec. 301(c)(1), I.R.C. 1954. Held, further, other petitioners who were…
1Opinion of the Court
Dawson, Judge:
In these consolidated cases respondent determined the following deficiencies in petitioners’ Federal income taxes for 1966:
Petitioners Pocket No, Pefictenaj
Tirzah A. Cox- 4052-70 $4, 422. 18
S. E. Copple and Tekla R. Copple_ 4069-70 22, 474. 90
S. Edward Copple and Mary Helen Copple_ 4082-70 4, 770. 40
Certain concessions have been made by the parties and will be given effect in the Rule 50 computations. The only question to be decided is whether the petitioners realized taxable income in the form of constructive dividends as a consequence of two payments made by the Commonwealth…
2Cases cited18 opinions
- Wall v. United StatesCourt of Appeals for the Fourth Circuit · 1947
- Rushing v. CommissionerUnited States Tax Court · 1969
- W. B. Rushing v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1971
- Tauber v. CommissionerUnited States Tax Court · 1955
- Baird v. CommissionerUnited States Tax Court · 1955
13 more not listed; retrieve them via the Exa API.
3Cited by29 opinions
- Yelencsics v. CommissionerUnited States Tax Court · 1980
- Kean v. CommissionerUnited States Tax Court · 1988
- Schwartz v. CommissionerUnited States Tax Court · 1978
- Kerry Inv. Co. v. CommissionerUnited States Tax Court · 1972
- Laure v. CommissionerUnited States Tax Court · 1978
24 more not listed; retrieve them via the Exa API.