Stinnett v. Commissioner
United States Tax Court
1. Held, non-interest-bearing notes issued to the stockholders of an electing small business corporation in exchange for their capital in the predecessor partnership, whether regarded as "debt" or as "equity," did not give rise to more than one class of stock within the meaning of sec. 1371(a), I.R.C. 1954. Regs. sec. 1.1371-1(g) invalidated. 2. Held, the leasehold term was for an indefinite period and leasehold improvements thereon must be depreciated over their useful life.
1ConcurrenceFeatherstoN, J.
I agree with the conclusion of the majority but add these thoughts.
The regulation we held invalid in W. C. Gammam, 46 T.C. 1 (1966), provided that “If an instrument purporting to be a debt obligation is actually stock, it will constitute a second class of stock.” (Emphasis added.) Following our decision in Gamman, this language was amended to provide that “Obligations which purport to represent debt but which actually represent equity capital will generally constitute a second class of stock.” (Emphasis added.) It is immediately observable that this new language is even less consistent with…
2Cases cited16 opinions
- Benjamin D. And Madeline Prentice Gilbert v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1957
- Benjamin D. And Madeline Prentice Gilbert, on Review v. Commissioner of Internal Revenue, on ReviewCourt of Appeals for the Second Circuit · 1959
- Kraft Foods Company v. Commissioner of Internal Revenue, (Two Cases)Court of Appeals for the Second Circuit · 1956
- Nassau Lens Co., Inc. v. Commissioner of Internal Revenue, Commissioner of Internal Revenue v. Harry Pildes and Sarah PildesCourt of Appeals for the Second Circuit · 1962
- Byerlite Corporation v. Parker C. Williams, District Director of Internal Revenue, Eighteenth District of OhioCourt of Appeals for the Sixth Circuit · 1960
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