Legal Opinion

Estate of Johnson v. Commissioner

United States Tax Court

Decided January 29, 1987No. Docket No. 18799-85Published

1. Decedent guaranteed a loan from a bank to a corporation of which he was majority shareholder and assigned insurance policies on his life as collateral.

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1. Decedent guaranteed a loan from a bank to a corporation of which he was majority shareholder and assigned insurance policies on his life as collateral. Decedent died before the notes were repaid; the bank collected $ 4.2 million in insurance proceeds, and assigned the notes to P (decedent's estate). P and R entered into a closing agreement pursuant to sec. 7121, I.R.C. 1954, setting the value for estate tax purposes and the unadjusted basis for income tax purposes of P's subordinated rights in the notes as of the date of decedent's death at $ 600,000. The notes were repaid in full in 1980…

1Opinion of the Court

Estate of Keith Wold Johnson, Deceased, Seymour M. Klein, Betty W. Johnson, and Robert J. Mortimer, Executors, Petitioner v. Commissioner of Internal Revenue, Respondent

Estate of Johnson v. Commissioner

Docket No. 18799-85

United States Tax Court

88 T.C. 225; 1987 U.S. Tax Ct. LEXIS 14; 88 T.C. No. 14;

January 29, 1987. January 29, 1987, Filed

Decision will be entered for the respondent.

1. Decedent guaranteed a loan from a bank to a corporation of which he was majority shareholder and assigned insurance policies on his life as collateral. Decedent died before the notes were repaid; the bank…

2Cases cited14 opinions

  1. Welch v. HelveringSupreme Court of the United States · 1933
  2. Achiro v. CommissionerUnited States Tax Court · 1981
  3. Farrier v. CommissionerUnited States Tax Court · 1950
  4. Commissioner of Internal Revenue v. StearnsCourt of Appeals for the Second Circuit · 1933
  5. Estate of O'Connor v. CommissionerUnited States Tax Court · 1977

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