Tilford v. Commissioner
United States Tax Court
Petitioner sold stock, subject to restrictions, in a corporation of which he was a majority shareholder, to employees in order to induce them to work for the corporation. Held: Capital loss deduction claimed by petitioner sustained, Downer v. Commissioner, 48 T.C. 86 (1967), followed. Sec. 1.83-6(d), Income Tax Regs., treating such transaction as capital contribution to the corporation, held invalid.
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Petitioner sold stock, subject to restrictions, in a corporation of which he was a majority shareholder, to employees in order to induce them to work for the corporation. Held: Capital loss deduction claimed by petitioner sustained, Downer v. Commissioner, 48 T.C. 86 (1967), followed. Sec. 1.83-6(d), Income Tax Regs., treating such transaction as capital contribution to the corporation, held invalid. Held, further, respondent's determination of ordinary income from sale of farm recapture property under sec. 1251, as a result of adjustments to the excess deductions account, sustained.
1Opinion of the Court
Irwin, Jwdge:
Respondent determined deficiencies in petitioners’ income tax as follows:
Year Deficiency Year Deficiency
1966 . $4,467.67 1970 . $3,644.06
1967 . 1,235.71 1972 . 68,650.84
1969 . 58,372.10 1973 . 46,897.37
Due to concessions by petitioners, the only issues remaining for our consideration are:(1) Whether section 831 denies petitioner a loss on the sale of stock of a corporation, in which he was the majority shareholder, made to employees of the corporation in order to induce them to work for it.(2) Whether respondent correctly determined the excess deductions account for purposes of…
2Cases cited25 opinions
- Commissioner v. South Texas Lumber Co.Supreme Court of the United States · 1948
- James v. United StatesSupreme Court of the United States · 1961
- Maryland Casualty Co. v. United StatesSupreme Court of the United States · 1920
- United States v. General Shoe CorporationCourt of Appeals for the Sixth Circuit · 1960
- Downer v. CommissionerUnited States Tax Court · 1967
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3Cited by16 opinions
- Commissioner v. FinkSupreme Court of the United States · 1987
- Henry C. Tilford, Jr. And Barbara N. Tilford v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1983
- Frantz v. CommissionerUnited States Tax Court · 1984
- Leroy Frantz, Jr. And Sheila Frantz v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1986
- Webb v. United StatesDistrict Court, S.D. Mississippi · 1982
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