Lynch v. Commissioner
United States Tax Court
Originally, P was the sole shareholder of C, a corporation. Later, P transferred some of his stock to S, his son, and thereafter, C redeemed the balance of P's stock. After the redemption, P performed some services for C pursuant to a consulting agreement. P was compensated under the consulting agreement, and P and his wife were covered under certain corporate medical plans.
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Originally, P was the sole shareholder of C, a corporation. Later, P transferred some of his stock to S, his son, and thereafter, C redeemed the balance of P's stock. After the redemption, P performed some services for C pursuant to a consulting agreement. P was compensated under the consulting agreement, and P and his wife were covered under certain corporate medical plans. Held, the redemption of P's stock qualifies as a complete redemption of his interest in C under sec. 302(b)(3), I.R.C. 1954, since he did not retain a prohibited interest in the corporation within the meaning of sec.…
1Opinion of the Court
Simpson, Judge:
The Commissioner determined deficiencies in the petitioners’ Federal income tax of $15,465.80 for 1974 and $389,852.27 for 1975. After concessions, the sole issue for decision is whether the redemption of all of the petitioner’s stock in W.M. Lynch Co. is taxable as dividend distributions under section 301 of the Internal Revenue Code of 19541 or as long-term capital gains under section 302(a). The answer turns on- whether the petitioner retained a prohibited interest in such corporation within the meaning of section 302(c)(2)(A)(i) and whether the principal purpose of a…
2Cases cited10 opinions
- Dunn v. CommissionerUnited States Tax Court · 1978
- Herbert A. Dunn and Georgia E. Dunn v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1980
- Riss v. CommissionerUnited States Tax Court · 1971
- Theatre Concessions, Inc. v. CommissionerUnited States Tax Court · 1958
- Lewis v. CommissionerUnited States Tax Court · 1966
5 more not listed; retrieve them via the Exa API.
3Cited by8 opinions
- Cerone v. CommissionerUnited States Tax Court · 1986
- Hurst v. Comm'rUnited States Tax Court · 2005
- William M. Lynch and Mima W. Lynch v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1986
- Cerone v. CommissionerUnited States Tax Court · 1986
- Clemente, Inc. v. CommissionerUnited States Tax Court · 1985
3 more not listed; retrieve them via the Exa API.