Heft v. Commissioner
United States Tax Court
Collapsible Corporation -- Liquidation -- Ordinary Income or Capital Gains -- Sec. 117(m). -- A corporation had not realized a substantial part of the net income to be derived from 53 lots, which it had bought and improved, prior to making a distribution in liquidation to its sole stockholder, the petitioner herein, and the corporation was a collapsible one within the meaning of section 117 (m) so that the petitioner's gain from his stock on the liquidation was taxable as…
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Collapsible Corporation -- Liquidation -- Ordinary Income or Capital Gains -- Sec. 117(m). -- A corporation had not realized a substantial part of the net income to be derived from 53 lots, which it had bought and improved, prior to making a distribution in liquidation to its sole stockholder, the petitioner herein, and the corporation was a collapsible one within the meaning of section 117 (m) so that the petitioner's gain from his stock on the liquidation was taxable as ordinary income and not capital gain.
1Opinion of the Court
OPINION'.
Murdock, Judge:
The Commissioner determined a deficiency of $27,582.20 in income tax of the petitioners for 1952. The facts have been submitted by stipulations which are adopted as the findings of fact. The question is whether a gain realized by the petitioner is taxable as ordinary income under section 117 (m).
The petitioners are husband and wife. They filed a joint return for 1952 on a cash basis with the district director of internal revenue at New Orleans, Louisiana. G. A. Heft will hereafter be referred to as the petitioner.
The petitioner owned all of the stock of Gulf…
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