Calloway v. Commissioner
United States Tax Court
In August 2001 P entered into an agreement with Derivium whereby P transferred 990 shares of IBM common stock to Derivium in exchange for $93,586.23. The terms of the agreement characterized the transaction as a loan of 90 percent of the value of the IBM stock pledged as collateral. The purported loan was nonrecourse and prohibited P from making any interest or principal payments during the 3-year term of the purported loan.
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In August 2001 P entered into an agreement with Derivium whereby P transferred 990 shares of IBM common stock to Derivium in exchange for $93,586.23. The terms of the agreement characterized the transaction as a loan of 90 percent of the value of the IBM stock pledged as collateral. The purported loan was nonrecourse and prohibited P from making any interest or principal payments during the 3-year term of the purported loan. The terms of the agreement allowed Derivium to sell the stock, which it did immediately upon receipt. At maturity P had the option of either paying the balance due and…
1Opinion of the Court
LIZZIE W. AND ALBERT L. CALLOWAY, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Calloway v. Comm'r
Docket No. 8438-07.
United States Tax Court
135 T.C. 26; 2010 U.S. Tax Ct. LEXIS 43; 135 T.C. No. 3;
July 8, 2010, Filed
Decision will be entered under Rule 155.
In August 2001 P entered into an agreement with Derivium whereby P transferred 990 shares of IBM common stock to Derivium in exchange for $93,586.23. The terms of the agreement characterized the transaction as a loan of 90 percent of the value of the IBM stock pledged as collateral. The purported loan was nonrecourse and…
Also in this document: Concurrence · Halpern; Concurrence · Holmes.
2Cases cited67 opinions
- Gregory v. HelveringSupreme Court of the United States · 1935
- Freytag v. CommissionerSupreme Court of the United States · 1991
- HIGBEE v. COMMISSIONER OF INTERNAL REVENUEUnited States Tax Court · 2001
- Commissioner v. Court Holding Co.Supreme Court of the United States · 1945
- United States v. BoyleSupreme Court of the United States · 1985
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