Estate of Diecks v. Commissioner
United States Tax Court
Diecks (now deceased) owned 20 percent of the stock of Cable Vista. Cable Vista had built and operated a cable TV system. Before Cable Vista, a subch. S corporation, had reported any taxable income, Diecks and the other shareholders sold their stock at a substantial gain. Held: Although Cable Vista was a collapsible corporation, within the meaning of sec. 341(b), there was on the facts no net unrealized appreciation in Cable Vista's subsec.
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Diecks (now deceased) owned 20 percent of the stock of Cable Vista. Cable Vista had built and operated a cable TV system. Before Cable Vista, a subch. S corporation, had reported any taxable income, Diecks and the other shareholders sold their stock at a substantial gain. Held: Although Cable Vista was a collapsible corporation, within the meaning of sec. 341(b), there was on the facts no net unrealized appreciation in Cable Vista's subsec. (e) assets (ordinary income assets), hence sec. 341(e)(1) applied to cause Cable Vista not to be considered collapsible for purposes of sec. 341(a)(1).…
1Opinion of the Court
OPINION
1. Collapsible Corporation Issue
Respondent contends that Cable Vista was a collapsible corporation within the meaning of section 341,2 and therefore that Diecks’ gain on the sale of the Cable Vista stock is taxable as ordinary income rather than long-term capital gain. Petitioner argues that Cable Vista was not a collapsible corporation when Diecks sdld his stock therein, and that if it were, the corporation came within the exception from application of the collapsible provisions provided in section 341(e)(1).
Section 341(a) provides that gain from the saje of stock of a collapsible…
2Cases cited12 opinions
- Commissioner v. P. G. Lake, Inc.Supreme Court of the United States · 1958
- Braunstein v. CommissionerSupreme Court of the United States · 1963
- United States v. Charles G. Eidson, Jr.Court of Appeals for the Fifth Circuit · 1962
- Nelson Weaver Realty Company, and Nelson Weaver Mortgage Company, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1962
- Commissioner of Internal Revenue v. James B. Kelley and Lena S. Kelley, and John Waltman and Doris WaltmanCourt of Appeals for the Fifth Circuit · 1961
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3Cited by6 opinions
- Rolland L. King and Arlene P. King v. United StatesCourt of Appeals for the Fifth Circuit · 1981
- Phyllis Ranier, Harry H. Ranier, and Juda Ranier v. United StatesCourt of Appeals for the Sixth Circuit · 1989
- Denemark v. CommissionerUnited States Tax Court · 1976
- Estate of Diecks v. CommissionerUnited States Tax Court · 1975
- Felix v. CommissionerUnited States Tax Court · 1981
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