James C. Cooper & Lorelei M. Cooper v. Commissioner

143 T.C. No. 10

UNITED STATES TAX COURT JAMES C. COOPER AND LORELEI M. COOPER, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 17284-12. Filed September 23, 2014. In 1997 P-H, an inventor, transferred several patents to T, a corporation. Ps own 24% of the outstanding stock of T. P-W’s sister and Ps’ friend own the remaining stock. P-H controlled T through its officers, directors, and shareholders. Ps reported royalty income that P-H received from T in exchange for the transfer of the patents as capital gain under I.R.C. sec. 1235(a) for 2006, 2007, and 2008. In 2006 P-H…