Perry v. Commissioner
United States Tax Court
1. P and D were partners whose proportionate share of the profits and losses of the partnership were 75 percent and 25 percent respectively. Held, the partners, anticipating a substantial operating loss, properly incorporated their business and effectively transferred all of the partnership assets to the corporation. 2. The corporation then properly elected to be taxed as a small business corporation under subchap.
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1. P and D were partners whose proportionate share of the profits and losses of the partnership were 75 percent and 25 percent respectively. Held, the partners, anticipating a substantial operating loss, properly incorporated their business and effectively transferred all of the partnership assets to the corporation. 2. The corporation then properly elected to be taxed as a small business corporation under subchap. S, I.R.C. 1954. Shortly thereafter the corporation transferred to P and his wife land with a value that exceeded P and his wife's basis in the stock of the corporation. Held, in…
1Opinion of the Court
OPINION
Issue 1. Incorporation and Transfer of the Partnership Business to the Corporation
The first issue is whether the corporation was properly formed and whether the business of the partnership was effectively transferred to it. Petitioners argue the negative and reason that the losses were actually sustained by the partnership, the same organization in which the partners had successfully done business for the past several years. However, respondent argues that all the requirements have been met for special treatment under sections 1371-1378 (subchap. S) and therefore petitioners should be…
2Cases cited10 opinions
- Eckert v. BurnetSupreme Court of the United States · 1931
- Helvering v. PriceSupreme Court of the United States · 1940
- Baltimore Dairy Lunch, Inc., a Corporation v. United StatesCourt of Appeals for the Eighth Circuit · 1956
- John E. Byrne v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1966
- Paterson & Edey Lumber Co. v. Carolina-Portland Cement Co.Supreme Court of Alabama · 1927
5 more not listed; retrieve them via the Exa API.
3Cited by25 opinions
- Crown v. CommissionerUnited States Tax Court · 1981
- Rubnitz v. CommissionerUnited States Tax Court · 1977
- Black Gold Energy Corp. v. CommissionerUnited States Tax Court · 1992
- Blue Flame Gas Co. v. CommissionerUnited States Tax Court · 1970
- Bernstein v. CommissionerUnited States Tax Court · 1989
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