Frankel v. Commissioner
United States Tax Court
Petitioners were shareholders in a subch. S corporation that operated a restaurant in an apartment building owned by a partnership which was owned by the shareholders in exact proportion to their shareholdings. Following heavy losses incurred by the corporation, the partnership loaned $ 234,150 over 2 years to the corporation. Losses in excess of stock basis were incurred in these 2 years.
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Petitioners were shareholders in a subch. S corporation that operated a restaurant in an apartment building owned by a partnership which was owned by the shareholders in exact proportion to their shareholdings. Following heavy losses incurred by the corporation, the partnership loaned $ 234,150 over 2 years to the corporation. Losses in excess of stock basis were incurred in these 2 years. Petitioners deducted the losses to the extent of their basis in loans made by the partnership. Held, the deduction under sec. 1374 (c)(2)(B), I.R.C. 1954, is limited to the shareholder's adjusted basis in…
1Opinion of the Court
OPINION
Dawson, Judge:
In these consolidated cases, submitted pursuant to Rule 30, Tax Court Rules of Practice, the respondent determined the following deficiencies:
Docket No. Year Amount Petitioners
8761-72 1969 $4,788.67 E. J. Frankel and Z. T. Frankel_
9292-72 1969 2,302.00 Seymour Golden and Doris Golden..
The only question for decision is whether or not loans made by a partnership to a subchapter S corporation constitute an indebtedness within the meaning of section 1374(c) (2) (B), I.R.C. 1954.1
All of the facts have been stipulated. The stipulation of facts and exhibits attached thereto are…
2Cases cited11 opinions
- United States v. BasyeSupreme Court of the United States · 1973
- Raynor v. CommissionerUnited States Tax Court · 1968
- 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
- Blum v. CommissionerUnited States Tax Court · 1972
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3Cited by28 opinions
- Resnik v. CommissionerUnited States Tax Court · 1976
- Hitchins v. CommissionerUnited States Tax Court · 1994
- Frederick G. Brown v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1983
- Larry Bergman Patricia Bergman v. United StatesCourt of Appeals for the Eighth Circuit · 1999
- Estate of Alton Bean, Deceased Gary A. Bean, Administrator Mable Bean v. Commissioner of Internal Revenue, Gary A. Bean Cynthia Bean v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 2001
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