Cleveland v. Commissioner
United States Tax Court
Petitioners acquired the stock of a corporation and soon afterward caused it to complete or terminate its existing contracts and to sell its equipment. During this period they received four distributions which they contend are liquidating distributions. The company, however, was also seeking a very large contract which it later obtained and performed. Held: There was no real contraction of business or liquidation until the new contract had been performed.
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Petitioners acquired the stock of a corporation and soon afterward caused it to complete or terminate its existing contracts and to sell its equipment. During this period they received four distributions which they contend are liquidating distributions. The company, however, was also seeking a very large contract which it later obtained and performed. Held: There was no real contraction of business or liquidation until the new contract had been performed. Since the relation of the petitioners to the corporation was not changed, the distributions were essentially equivalent to dividends under…
1Opinion of the Court
Hoyt, Judge:
The respondent determined deficiencies in petitioners’ income taxes for the years 1953 and 1954, as follows:
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The issue for decision is whether four distributions made to the petitioners by Britton Contracting Co. were made in the course of liquidation under sections 115(c) and 115 (i) of the 1939 Internal Bevenue Code so as to be taxed as capital gains or were essentially equivalent to a dividend under sections 115(a) and 115(g) so as to constitute ordinary taxable income.
FINDINGS OP PACT.
Some of the facts have been stipulated and are so found.
Bobert W. Cleveland and…
2Cases cited11 opinions
- Flanagan v. HelveringCourt of Appeals for the D.C. Circuit · 1940
- Towers v. CommissionerUnited States Tax Court · 1955
- Boyle v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 1951
- Heman v. CommissionerUnited States Tax Court · 1959
- R. D. Merrill Co. v. CommissionerUnited States Tax Court · 1945
6 more not listed; retrieve them via the Exa API.
3Cited by5 opinions
- Cleveland v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 1964
- Charlie Sturgill Motor Co. v. CommissionerUnited States Tax Court · 1973
- Cleveland v. CommissionerUnited States Tax Court · 1963
- PITTS v. COMMISSIONERUnited States Tax Court · 1978
- Robert W. Cleveland and Anita H. Cleveland v. Commissioner of Internal Revenue, Royal E. Cleveland and Alvina D. Cleveland v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 1964