Johnston v. Commissioner
United States Tax Court
An agreement made in 1973 between petitioner and a closely held family corporation obligated the corporation annually to redeem 40 of petitioner's shares. In each of the years 1976, 1977, and 1978, it redeemed 40 shares pursuant to the agreement; however, it made no redemptions in 1974, 1975, and 1979. Petitioner did not attempt to enforce the corporation's redemption obligation in the years when it failed to redeem her shares.
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An agreement made in 1973 between petitioner and a closely held family corporation obligated the corporation annually to redeem 40 of petitioner's shares. In each of the years 1976, 1977, and 1978, it redeemed 40 shares pursuant to the agreement; however, it made no redemptions in 1974, 1975, and 1979. Petitioner did not attempt to enforce the corporation's redemption obligation in the years when it failed to redeem her shares. Held, the 1976 redemption was not an integrated step in a firm and fixed plan to redeem petitioner's shares, and, consequently, the distribution in redemption of…
1Opinion of the Court
Ekman, Judge:
Respondent determined a deficiency in petitioner’s Federal income tax for the taxable year ending December 31, 1976, in the amount of $8,088.38. The issue for decision is whether $28,750 received by petitioner in redemption of a portion of her shares in a closely held corporation should be treated as a capital gain pursuant to sections 302(a) and 302(b)(1), I.R.C. 19541
FINDINGS OF FACT
Some of the facts have been stipulated by the parties and are found accordingly. The stipulation of facts and exhibits attached thereto are incorporated herein by this reference.
Petitioner Mary…
2Cases cited9 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- United States v. DavisSupreme Court of the United States · 1970
- Benjamin v. CommissionerUnited States Tax Court · 1976
- Blanche S. Benjamin v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1979
- Niedermeyer v. CommissionerUnited States Tax Court · 1974
4 more not listed; retrieve them via the Exa API.
3Cited by4 opinions
- Glacier State Electric Supply Co. v. CommissionerUnited States Tax Court · 1983
- Glacier State Electric Supply Co. v. CommissionerUnited States Tax Court · 1983
- Johnston v. CommissionerUnited States Tax Court · 1981
- Lettmann v. CommissionerUnited States Tax Court · 1982