Holladay v. Commissioner
United States Tax Court
Petitioner formed a joint venture with Babcock Co. to complete development of an apartment complex. Babcock Co. previously had obtained the land and begun construction. Petitioner agreed to provide an equity contribution of $ 750,000 and loans up to $ 1 million. Each party agreed to share equally the burden of providing whatever additional financing might be necessary.
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Petitioner formed a joint venture with Babcock Co. to complete development of an apartment complex. Babcock Co. previously had obtained the land and begun construction. Petitioner agreed to provide an equity contribution of $ 750,000 and loans up to $ 1 million. Each party agreed to share equally the burden of providing whatever additional financing might be necessary. With regard to equity cash distributions, the parties agreed to split the first $ 100,000, to distribute the next $ 150,000 to Babcock Co., and thereafter to share equally. Notwithstanding this nearly equal division of economic…
1Concurrence · TannenwaldTannenwald, J.
Initially, I confess that I find myself on the horns of a dilemma due to two factors: (a) respondent’s concession that the test of principal purpose of tax avoidance or evasion, contained in section 704(b)(2), does not apply, and (b) the fact that the ultimate decision herein is founded upon the evaluation of the record, including extensive oral testimony, by the trier of the facts, Judge Dawson.
As I view the majority opinion, it appears to me to articulate an inadequate standard for decision. In essence, the opinion seems to say that “economic substance” or “economic effect” is to be…
Also in this document: Concurrence · Simpson.
2Cases cited12 opinions
- Karl F. Knetsch and Eva Fay Knetsch v. The United StatesUnited States Court of Claims · 1965
- E. Keith Owens v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1977
- Norman and Arlene Rodman, Appellants-Cross-Appellees v. Commissioner of Internal Revenue, Appellee-Cross-AppellantCourt of Appeals for the Second Circuit · 1976
- Orrisch v. CommissionerUnited States Tax Court · 1970
- Moore v. CommissionerUnited States Tax Court · 1978
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