Rojas v. Commissioner
United States Tax Court
D and E are the transferees and former majority shareholders of S, a corporation that had been engaged in the business of farming row crops. S adopted a plan of complete liquidation and pursuant to that plan, distributed to its majority shareholders all its operating assets, including certain harvested and unharvested crops.
Read the full summary
D and E are the transferees and former majority shareholders of S, a corporation that had been engaged in the business of farming row crops. S adopted a plan of complete liquidation and pursuant to that plan, distributed to its majority shareholders all its operating assets, including certain harvested and unharvested crops. Prior to the liquidation, S had deducted, pursuant to sec. 162(a), I.R.C. 1954, expenses incurred in connection with the cost of cultivating these crops. Held, the tax-benefit rule does not require S to include in income the expenses deducted for materials and services…
1DissentHamblen, J.
I agree with and join the
dissenting opinion of Judge Nims. The action of the majority in this case does more than “reopen a loophole which the Supreme Court thought it had closed in Bliss Dairy”; its action erodes the tax-benefit rule.
The majority suggests that respondent would have us go beyond Bliss Dairy. I, however, submit that respondent is asking us only to be consistent with the rule of that case.
In Bliss Dairy, the Supreme Court established the tax-benefit rule’s parameters, stating, “the tax benefit rule will ‘cancel out’ an earlier deduction only when a careful examination shows…
2Cases cited20 opinions
- Jack E. Golsen and Sylvia H. Golsen v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1971
- Thor Power Tool Co. v. CommissionerSupreme Court of the United States · 1979
- Greenberg's Express, Inc. v. CommissionerUnited States Tax Court · 1974
- Endicott Johnson Corp. v. PerkinsSupreme Court of the United States · 1943
- Hillsboro National Bank v. CommissionerSupreme Court of the United States · 1983
15 more not listed; retrieve them via the Exa API.