Raynor v. Commissioner
United States Tax Court
Petitioners were shareholders in corporations which had elected to be free from tax under subch. S of chap. 1, I.R.C. 1954. During the years 1961-63, inclusive, petitioners advanced funds to the corporations on open account, and lent their credit to the corporations so that the corporations could obtain funds from third parties. The corporations suffered net operating losses in the years 1961-63, inclusive.
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Petitioners were shareholders in corporations which had elected to be free from tax under subch. S of chap. 1, I.R.C. 1954. During the years 1961-63, inclusive, petitioners advanced funds to the corporations on open account, and lent their credit to the corporations so that the corporations could obtain funds from third parties. The corporations suffered net operating losses in the years 1961-63, inclusive. Held, the advances by petitioners to the corporations did not create a "second class of stock." Held, further, petitioners are entitled to deduct the corporate net operating losses in…
1Opinion of the Court
FeatheestoN, Judge:
Respondent determined deficiencies in petitioners’ Federal income taxes for 1961-63, inclusive, as follows:
Year Docket No. S7Í8S6 Docket No. S1U-6B
1961 $12, 933. 66 $224, 956. 60
1962 30, 831. 65 214, 892. 74
1963 43, 105. 57 220, 721. 93
Some of the items of the deficiencies have been settled by the parties. The issues remaining for decision are whether three corporations qualified as electing small business corporations under subchapter S of chapter 1 of the Internal Revenue Code of 1954, and, if so, the amount of corporate net operating losses deductible by petitioners…
2Cases cited6 opinions
- Burnet v. HuffSupreme Court of the United States · 1933
- Perry v. CommissionerUnited States Tax Court · 1966
- William H. Perry and Marian E. Perry v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1968
- Borg v. CommissionerUnited States Tax Court · 1968
- Gamman v. CommissionerUnited States Tax Court · 1966
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3Cited by65 opinions
- Morris G. Underwood and Jackie Underwood, Individuals v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1976
- Underwood v. CommissionerUnited States Tax Court · 1975
- Estate of Leavitt v. CommissionerUnited States Tax Court · 1988
- Edward M. Selfe and Jane B. Selfe v. United StatesCourt of Appeals for the Eleventh Circuit · 1985
- Blum v. CommissionerUnited States Tax Court · 1972
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