Julio v. Commissioner
United States Tax Court
Claire Construction Co., a personal holding company, was liquidated and all of its assets were transferred to its shareholders. At liquidation the corporation's liabilities included "qualified indebtedness" as defined in sec. 545(c)(3). Sec. 545(c)(1) allows a deduction from taxable income in computing undistributed personal holding company income of amounts paid to retire qualified indebtedness.
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Claire Construction Co., a personal holding company, was liquidated and all of its assets were transferred to its shareholders. At liquidation the corporation's liabilities included "qualified indebtedness" as defined in sec. 545(c)(3). Sec. 545(c)(1) allows a deduction from taxable income in computing undistributed personal holding company income of amounts paid to retire qualified indebtedness. Held, the mere distribution of assets in liquidation, coupled with the assumption by the distributee-shareholders of the distributor's liabilities, does not meet the requirement of sec. 545(c)(1)…
1Opinion of the Court
OPINION
Hall, Judge:
Respondent determined that petitioners, as transferees of the assets of Claire Construction Co., Inc., are liable for a $5,350.46 deficiency in Claire’s corporate income tax for the year 1973, plus interest.
This case was submitted fully stipulated under Rule 122, Tax Court Rules of Practice and Procedure. The sole issue remaining is whether a special adjustments deduction to personal holding company income for qualified indebtedness paid or retired should be allowed pursuant to section 545(c)(1)1 in the amount of $15,491.45.
Claire Construction Co., Inc. (Claire),…
2Cases cited3 opinions
- Focht v. CommissionerUnited States Tax Court · 1977
- Citizens Nat. Trust & Savings Bank of Los Angeles v. WelchCourt of Appeals for the Ninth Circuit · 1941
- I. E. Doggett v. Commissioner of Internal RevenueCourt of Appeals for the Fourth Circuit · 1960
3Cited by4 opinions
- Commercial Sec. Bank v. CommissionerUnited States Tax Court · 1981
- Borggaard v. CommissionerUnited States Tax Court · 1979
- Commercial Sec. Bank v. CommissionerUnited States Tax Court · 1981
- Julio v. CommissionerUnited States Tax Court · 1977