Raich v. Commissioner
United States Tax Court
In 1961, petitioners, pursuant to section 351, I.R.C. 1954, transferred all the assets and liabilities of their sole proprietorship to their controlled corporation in exchange for its entire capital stock and a promissory note payable on demand.
Read the full summary
In 1961, petitioners, pursuant to section 351, I.R.C. 1954, transferred all the assets and liabilities of their sole proprietorship to their controlled corporation in exchange for its entire capital stock and a promissory note payable on demand. The principal asset transferred was trade accounts receivable, having a book value of $ 77,361.66. Held: 1. Section 357(c) is applicable and petitioners are taxable on the excess of liabilities assumed by the corporation over petitioners' adjusted basis of property transferred. 2. Trade accounts receivable in hands of cash basis taxpayer have zero…
1Opinion of the Court
OPINION
Withe y, Judge:
Respondent determined deficiencies in petitioners’ income tax for the calendar years 1961 and 1962 in the amounts of $12,840.49 and $221.84, respectively. Petitioners have conceded some of the issues raised by their petition, leaving the following issues to be decided:(1) Whether the transfer by petitioners in 1961 of the assets and liabilities of their sole proprietorship to their controlled corporation constituted a taxable exchange under sections 351 and 357 (c) of the Internal Revenue Code of 1954.(2) Whether petitioners’ receipt from the corporation of a promissory…
2Cases cited15 opinions
- United States v. Garbutt Oil Co.Supreme Court of the United States · 1938
- Helvering v. Cement Investors, Inc.Supreme Court of the United States · 1942
- Watson v. CommissionerSupreme Court of the United States · 1953
- Williams v. McGowanCourt of Appeals for the Second Circuit · 1945
- Camp Wolters Enterprises, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1956
10 more not listed; retrieve them via the Exa API.
3Cited by27 opinions
- Hempt Bros., Inc. v. United StatesCourt of Appeals for the Third Circuit · 1974
- Nye v. CommissionerUnited States Tax Court · 1968
- John P. And Alice Bongiovanni v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1972
- Focht v. CommissionerUnited States Tax Court · 1977
- Alderman v. CommissionerUnited States Tax Court · 1971
22 more not listed; retrieve them via the Exa API.