Steadman v. Comm'r
United States Tax Court
Petitioner, an attorney, purchased 32,000 additional shares of stock in a corporation to protect his position as its secretary and general counsel. The corporation's organizational concept called for extensive acquisitions and mergers involving considerable legal planning.
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Petitioner, an attorney, purchased 32,000 additional shares of stock in a corporation to protect his position as its secretary and general counsel. The corporation's organizational concept called for extensive acquisitions and mergers involving considerable legal planning. The corporation suffered a large loss in 1962 causing a deficit in the shareholders' equity and was adjudicated bankrupt in 1964. Held, the corporation's stock became worthless in 1962. Held further, petitioner is entitled to deduct the loss occasioned by the worthlessness of the 32,000 shares as an ordinary loss under sec.…
1Opinion of the Court
Dawson, Judge:
Respondent determined a deficiency in the income tax of petitioners for the year 1962 in the ‘amount of $67,138.73.
The parties have made concessions which can be given effect 'in the Rule 50 computation. Two issues remain for decision: (1) Whether 32,000 shares of common shock of Richards Musical Instruments, Inc., held by petitioner became worthless in 1962, and, if so, (2) whether petitioners are entitled to a deduction in 1962 of $80,000, their cost basis in the shares, as an ordinary loss under section 165(a), I.R.C. 1954,1 or as a capital loss under section 165 (g).
FINDINGS…
2Cases cited16 opinions
- Corn Products Refining Co. v. CommissionerSupreme Court of the United States · 1956
- United States v. S. S. White Dental Manufacturing Co.Supreme Court of the United States · 1927
- Morton v. CommissionerUnited States Board of Tax Appeals · 1938
- Morton v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1940
- Commissioner of Internal Revenue v. The Bagley & Sewall Co.Court of Appeals for the Second Circuit · 1955
11 more not listed; retrieve them via the Exa API.
3Cited by65 opinions
- Dustin v. CommissionerUnited States Tax Court · 1969
- W. W. Windle Co. v. CommissionerUnited States Tax Court · 1976
- Charles W. Steadman and Dorothy F. Steadman v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1970
- Fox v. CommissionerUnited States Tax Court · 1968
- Cozzi v. CommissionerUnited States Tax Court · 1987
60 more not listed; retrieve them via the Exa API.