Five Star Mfg. Co. v. Commissioner
United States Tax Court
The petitioner obtained a judgment for money borrowed against one of its two stockholders who owned 50 percent of its stock and upon order of the court the stockholder's stock was sold at public auction. The petitioner acquired the stock upon a bid of $ 56,000 and, as permitted by the court, made payment of its bid by crediting $ 56,000 on the judgment it had obtained against the stockholder.
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The petitioner obtained a judgment for money borrowed against one of its two stockholders who owned 50 percent of its stock and upon order of the court the stockholder's stock was sold at public auction. The petitioner acquired the stock upon a bid of $ 56,000 and, as permitted by the court, made payment of its bid by crediting $ 56,000 on the judgment it had obtained against the stockholder. Held, that the petitioner's stock so acquired had a fair market value of at least $ 56,000 on the date of acquisition by the petitioner and that the petitioner is not entitled to deduct any amount,…
1Opinion of the Court
Atkins, Judge:
The respondent determined a deficiency in income tax for the taxable year ended June 30, 1957, in the amount of $18,377.89.
The issue presented is whether the petitioner is entitled to deduct for its taxable year ended June 30, 1955, the amount of $56,000, or any part thereof, credited on its books against the outstanding indebtedness of one of its two stockholders, upon its acquisition from such stockholder of 50 percent of its outstanding stock. Dependent on the decision of this issue is the amount of a net operating loss carryover to petitioner’s taxable year ended June 30,…
2Cases cited11 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Illinois Commerce Commission v. United StatesSupreme Court of the United States · 1934
- Hotel Kingkade v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1950
- O'malley, Collector of Internal Revenue v. AmesCourt of Appeals for the Eighth Circuit · 1952
- Whitlow v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1936
6 more not listed; retrieve them via the Exa API.
3Cited by13 opinions
- Fort Howard Corp. v. CommissionerUnited States Tax Court · 1994
- Five Star Manufacturing Company v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1966
- Harder Services, Inc. v. CommissionerUnited States Tax Court · 1976
- Frederick Weisman Co. v. CommissionerUnited States Tax Court · 1991
- Proskauer v. CommissionerUnited States Tax Court · 1983
8 more not listed; retrieve them via the Exa API.