Lair v. Commissioner
United States Tax Court
T, a retired farmer, leased his farm to his son Paul, who conducted a farming business thereon. In June 1984, T guaranteed Paul's indebtedness to a bank incurred in that business. The son did not give T either cash or property as consideration for the guarantee. In November and December 1984, T paid $ 141,000 to the bank pursuant to the guarantee.
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T, a retired farmer, leased his farm to his son Paul, who conducted a farming business thereon. In June 1984, T guaranteed Paul's indebtedness to a bank incurred in that business. The son did not give T either cash or property as consideration for the guarantee. In November and December 1984, T paid $ 141,000 to the bank pursuant to the guarantee. As recognized in Putnam v. Commissioner, 352 U.S. 82, 84 (1956), the son's debt to the bank became a debt to T upon T's payment under the guarantee. T and his wife filed a joint return for 1984, in which they claimed a $ 141,000 short-term capital…
1Opinion of the Court
OPINION
RAUM, Judge:
The Commissioner determined deficiencies in income tax and additions to tax against petitioners, Webster Lair and Pearl Lair, husband and wife, for the calendar years 1984 and 1985 in the following amounts:
Year Deficiency Sec. 6653(a)(1)1 Sec. 6653(a)(2) Sec. 6661
1984 $21,480 $1,340 * $5,370
1985 294 161 *
*50 percent of the interest due on $26,793 for 1984 and $3,226 for 1985.2
The case was submitted on the basis of a stipulation of facts and accompanying exhibits. Webster Lair alone participated in the transactions involved; he will be referred to herein as petitioner or…
2Cases cited10 opinions
- Bixby v. CommissionerUnited States Tax Court · 1972
- Putnam v. CommissionerSupreme Court of the United States · 1956
- Wallace J. Vnuk and Frances R. Vnuk v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1980
- Schirmer v. CommissionerUnited States Tax Court · 1987
- Estate of Edward H. Luehrmann, Deceased v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1961
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