Beirne v. Commissioner
United States Tax Court
Petitioner purported to transfer to his minor children 90 percent of the stock of Kelly Supply Co. which then elected to be taxed as a subchapter S corporation. Held, that the purported transfers were not bona fide as they lacked economic reality and petitioner remained the real owner of the stock; accordingly, all income of the corporation is taxable to petitioner.
1Opinion of the Court
OPINION
The issue to be decided in this case relates to the income tax consequences of petitioner’s purported gifts to his minor children of 90 percent of the outstanding stock of Kelly Supply, which then elected to be taxed as a subchapter S corporation. Kespondent contends that the purported gifts were so devoid of economic reality that they should be disregarded for tax purposes and that all of the taxable income of Kelly Supply should be taxable to petitioner as the actual owner of the stock.5 In the event we recognize petitioner’s children as the owners of the stock, respondent contends…
2Cases cited9 opinions
- Helvering v. CliffordSupreme Court of the United States · 1940
- Commissioner v. Court Holding Co.Supreme Court of the United States · 1945
- Commissioner v. TowerSupreme Court of the United States · 1946
- Corliss v. BowersSupreme Court of the United States · 1930
- Anderson v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1947
4 more not listed; retrieve them via the Exa API.
3Cited by25 opinions
- Esmark, Inc. v. CommissionerUnited States Tax Court · 1988
- Hook v. CommissionerUnited States Tax Court · 1972
- Hang v. CommissionerUnited States Tax Court · 1990
- William B. Wilson v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1977
- Gino A. Speca and Vera Speca v. Commissioner of Internal Revenue, Joseph F. Madrigrano and Shirley M. Madrigrano v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1980
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