Legal Opinion

Ewing v. Commissioner

United States Tax Court

Decided November 29, 1956No. Docket Nos. 54231, 54232, 54233, 54234PublishedCited by 4 opinions

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Income Tax -- Deductions. -- Held, that amounts paid by the petitioners, as transferees, in satisfaction of the transferor corporation's tax liability are deductible as capital losses, and not as ordinary losses. Arrowsmith v. Commissioner, 344 U.S. 60. Held, further, that amounts paid by them, as transferees, in satisfaction of the liability of the corporation for interest on its tax liability accrued prior to the date of transfer of assets of the corporation to them are not deductible by them as interest, but are deductible as capital losses.

1Opinion of the Court

OPINION.

Atkins, Judge:

The petitioners contend that because the liabilities of the dissolved corporation which they paid as transferees resulted almost entirely from the disallowance by the respondent as deductions of portions of salaries paid them and determined by the respondent to be excessive, because they received the salaries and paid taxes thereon as ordinary income, and because the amounts paid by them, as transferees, were less than the portions of the salaries disallowed, they are entitled to deduct the transferee liabilities paid by them as ordinary, rather than capital, losses. It…

2Cases cited5 opinions

Healy v. CommissionerSupreme Court of the United States · 1953
Arrowsmith v. CommissionerSupreme Court of the United States · 1952
Leach v. CommissionerUnited States Tax Court · 1953
Koppers Co. v. CommissionerUnited States Tax Court · 1944
Johnson v. CommissionerUnited States Tax Court · 1952

3Cited by4 opinions

Floyd C. Ewing v. Commissioner Of Internal RevenueCourt of Appeals for the Sixth Circuit · 1958
Ewing v. CommissionerUnited States Tax Court · 1956
Ewing v. CommissionerCourt of Appeals for the Sixth Circuit · 1958
Marcus v. CommissionerUnited States Tax Court · 1964