Edward Sec. Corp. v. Commissioner
United States Board of Tax Appeals
A corporation is an entity distinct from its stockholders, and only under exceptional or unusual circumstances can the corporate entity be disregarded. The sale of stock at the market price by a corporation to its stockholder, owning all but two of its shares and controlling those, under all the other facts and circumstances, was a bona fide sale.
1Opinion of the Court
*920OPINION.
McMahon :
The only issue to be considered in this proceeding is whether the respondent erred in disallowing a deduction in the sum of $15,100 representing a loss resulting from the sale in 1930 by the petitioner of 50 shares of the stock of the Sheridan Trust & Savings Bank.
The position of the respondent is, first, that the sale was not a bona fide sale, and secondly, if it were a bona fide sale, the stock was sold to an individual who was not only in control of the corporation, but owned all except two qualifying directorship shares out of a total of 9,982 outstanding shares, and,…
2Cases cited17 opinions
- New Colonial Ice Co. v. HelveringSupreme Court of the United States · 1934
- Eisner v. MacOmberSupreme Court of the United States · 1920
- United States v. PhellisSupreme Court of the United States · 1921
- Burnet v. ClarkSupreme Court of the United States · 1932
- Burnet v. Commonwealth Improvement Co.Supreme Court of the United States · 1932
12 more not listed; retrieve them via the Exa API.
3Cited by9 opinions
- Hughes v. CommissionerUnited States Tax Court · 1964
- Eldridge v. CommissionerUnited States Board of Tax Appeals · 1934
- Bateman v. CommissionerUnited States Board of Tax Appeals · 1936
- Edward Sec. Corp. v. CommissionerUnited States Board of Tax Appeals · 1934
- Franklin v. CommissionerUnited States Board of Tax Appeals · 1936
4 more not listed; retrieve them via the Exa API.