Estate of Durkin v. Commissioner
United States Tax Court
Ps and Green (G) were shareholders in GACC. After well-informed negotiations between Ps and G, GACC sold property to Ps, and Ps sold their GACC stock to G at a price equal to Ps' basis. As structured by Ps and G, no Federal income tax resulted to Ps or G from the sales. No GACC stock was redeemed pursuant to these sales. Respondent determined that the sale of property to Ps was at a bargain price, taxable as a constructive dividend to Ps.
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Ps and Green (G) were shareholders in GACC. After well-informed negotiations between Ps and G, GACC sold property to Ps, and Ps sold their GACC stock to G at a price equal to Ps' basis. As structured by Ps and G, no Federal income tax resulted to Ps or G from the sales. No GACC stock was redeemed pursuant to these sales. Respondent determined that the sale of property to Ps was at a bargain price, taxable as a constructive dividend to Ps. After respondent's determination, Ps sought to recharacterize the transaction as a redemption. Ps contended that the two sales should be taxed as if their…
1Opinion of the Court
Colvin, Judge:
Respondent determined deficiencies in petitioners’ Federal income tax of $75,293 for 1973, $244,229 for 1974, $4,234,380 for 1975, $124,345 for 1976, $72,325 for 1977, and $95,160 for 1978.
Following concessions, a conditional settlement of various issues, and our opinion in Estate of Durkin v. Commissioner, T.C. Memo. 1992-325, the sole remaining issue for decision is whether petitioners’ bargain purchase of culm banks on June 26, 1975, resulted in a constructive dividend to petitioners. We hold that it did.
In Estate of Durkin v. Commissioner, supra, filed June 8, 1992, we…
2Cases cited54 opinions
- Gregory v. HelveringSupreme Court of the United States · 1935
- Higgins v. SmithSupreme Court of the United States · 1940
- Moline Properties, Inc. v. CommissionerSupreme Court of the United States · 1943
- Frank Lyon Co. v. United StatesSupreme Court of the United States · 1978
- Commissioner v. National Alfalfa Dehydrating & Milling Co.Supreme Court of the United States · 1974
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3Cited by38 opinions
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- Rath v. CommissionerUnited States Tax Court · 1993
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