Haley Bros. Constr. Corp. v. Commissioner
United States Tax Court
On June 18, 1977, petitioner HBC, then a subchapter S corporation, acquired all the stock of an existing corporation (M) that was actively engaged in the business of developing and selling residential real estate lots from a subdivision it owned. Because M was indebted to HBC and was experiencing financial difficulties, HBC decided to acquire M's stock and to complete the real estate development itself.
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On June 18, 1977, petitioner HBC, then a subchapter S corporation, acquired all the stock of an existing corporation (M) that was actively engaged in the business of developing and selling residential real estate lots from a subdivision it owned. Because M was indebted to HBC and was experiencing financial difficulties, HBC decided to acquire M's stock and to complete the real estate development itself. HBC proceeded to clear up M's outstanding debts and, in many respects, operated M as if it were a division of itself. HBC, formally dissolved M on May 10, 1979. Held: HBC's subchapter S…
1Opinion of the Court
CHABOT, Judge:
Respondent determined a deficiency in Federal corporate income tax against Haley Bros. Construction Corp. for 1977 in the amount of $43,942.43. Respondent determined deficiencies in Federal individual income tax against John W. Haley and Mary A. Haley, and against Francis J. Haley and Bonnie J. Haley, for 1977 in the amounts of $5,617 and $1,962, respectively. After concessions by petitioners, the issue for decision is whether Haley Bros. Construction Corp.’s status as a subchapter S corporation under section 13711 terminated in 1977 when it acquired 100 percent of the stock of…
2Cases cited16 opinions
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- Stubbs, Overbeck & Associates, Inc. v. United StatesCourt of Appeals for the Fifth Circuit · 1971
- Swanson v. CommissionerSupreme Court of the United States · 1935
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