Johnson-McReynolds Chevrolet Corp. v. Commissioner
United States Tax Court
1. In 1949, petitioner transferred an incompleted building, which the contractor agreed would have a total cost value of $ 175,000, to one of its two principal stockholders in exchange for shares of its stock having a value of approximately $ 125,000, together with cash in the amount of approximately $ 50,000. Several months after the transfer, the contractor submitted an additional bill, which claim petitioner compromised and paid in the amount of $ 7,663.50. Held,…
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1. In 1949, petitioner transferred an incompleted building, which the contractor agreed would have a total cost value of $ 175,000, to one of its two principal stockholders in exchange for shares of its stock having a value of approximately $ 125,000, together with cash in the amount of approximately $ 50,000. Several months after the transfer, the contractor submitted an additional bill, which claim petitioner compromised and paid in the amount of $ 7,663.50. Held, petitioner's exchange of its incompleted building for shares of its stock and cash was a sale of property used in its trade or…
1Opinion of the Court
OPINION.
Rice, Judge:
In support of his determination disallowing the deduction taken by petitioner because of its payment of a claim in 1949, respondent contends that the amount paid was directly related to the exchange of the building for the stock owned by Johnson’s estate; that such exchange was clearly a partial liquidation, as defined by section 115 (i)2 of the 1939 Code; and that, therefore, no gain or loss may be recognized on the transaction. The petitioner, on the other hand, contends that the payment which it made to the contractor was only an ordinary compromise of a claim which…
2Cases cited5 opinions
- Burnet v. HarmelSupreme Court of the United States · 1932
- Corn Products Refining Co. v. CommissionerSupreme Court of the United States · 1956
- Carter-Colton Cigar Co. v. CommissionerUnited States Tax Court · 1947
- Dorsey Co. v. CommissionerCourt of Appeals for the Fifth Circuit · 1935
- W. R. Stephens Co. v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1952
3Cited by24 opinions
- Esmark, Inc. v. CommissionerUnited States Tax Court · 1988
- Anderson v. CommissionerUnited States Tax Court · 1971
- Luhring Motor Co. v. CommissionerUnited States Tax Court · 1964
- Duval Motor Company v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1959
- Estate of Runnels v. CommissionerUnited States Tax Court · 1970
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