Hook v. Commissioner
United States Tax Court
On Dec. 30, 1966, the petitioner transferred certain stock to his attorney in order to terminate the "subchapter S" election by a corporation of which the petitioner was the sole shareholder. The attorney paid no money and performed no services for the stock and, on request, returned it to the petitioner on July 20, 1967, without receiving any consideration therefor.
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On Dec. 30, 1966, the petitioner transferred certain stock to his attorney in order to terminate the "subchapter S" election by a corporation of which the petitioner was the sole shareholder. The attorney paid no money and performed no services for the stock and, on request, returned it to the petitioner on July 20, 1967, without receiving any consideration therefor. Held, the transfer of stock was not bona fide and had no economic reality, and such transfer was insufficient to terminate the corporation's subch. S election under sec. 1372(e)(1), I.R.C. 1954.
1Opinion of the Court
Simpson, Judge:
The respondent determined a deficiency of $16,977.61 in the petitioners’ 1966 Federal income tax. The issue for decision is whether a transfer of stock to a nonconsenting shareholder caused a termination of a “subchapter S” election by a corporation.
FINDINGS OP PACT
Some of the facts were stipulated, and those facts are so found.
The petitioners, Clarence L. Hook and Vivian L. Hook, are husband and wife, who maintained their residence in Bellevue, Wash., at the time of filing their petition in this case. They filed their joint 1966 Federal income tax return with the Western…
2Cases cited6 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
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- Beirne v. CommissionerUnited States Tax Court · 1969
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