Smith v. Comm'r
United States Tax Court
In 1961 the taxpayers (husband and wife) sold their controlling stock interest in American Gas to Union Oil under an installment sale contract payable over a 5-year period.
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In 1961 the taxpayers (husband and wife) sold their controlling stock interest in American Gas to Union Oil under an installment sale contract payable over a 5-year period. They properly elected to report their gain on the installment method under sec. 453, I.R.C. 1954. In 1964, when over $ 700,000 in gain remained yet to be reported, the taxpayers and their advisers devised a plan whereby the taxpayers undertook to transfer the installment contract to their two children, the children undertook to pay annuities to the parents, and each child executed an instrument establishing a trust…
1Opinion of the Court
OPINION
Naum, Judge:
1. In 1961 Harold and Caroline Smith sold their American Gas stock to Union Oil. The sale price finally agreed upon was $1,786,994.75, of which 459,812.13 was paid in 1961 and the balance was to be paid in annual installments over a 5-year period. On their 1961 joint Federal income tax return, the Smiths properly elected to report their gain from the sale on the installment method under section 453.9 By the end of 1963, the unpaid balance of the total purchase price due from Union Oil was $796,309.56, and of that amount $715,710.28 represented gain to be reported by the…
2Cases cited42 opinions
- Gregory v. HelveringSupreme Court of the United States · 1935
- Deputy, Administratrix v. Du PontSupreme Court of the United States · 1940
- Commissioner v. Court Holding Co.Supreme Court of the United States · 1945
- Helvering v. HorstSupreme Court of the United States · 1940
- Higgins v. SmithSupreme Court of the United States · 1940
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3Cited by1 opinion
- Smith v. Comm'rUnited States Tax Court · 1971