Hobby v. Commissioner
United States Tax Court
In four instances in the tax year, preferred shares owned by the taxpayer were soon to be redeemed at par by the corporation, as the taxpayer expected, and he sold them in one instance to a friend for a price less than par so that the gain would be realized as a gain from sale taxable as a long term capital gain and in three instances for par, after which the purchaser would receive a dividend.
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In four instances in the tax year, preferred shares owned by the taxpayer were soon to be redeemed at par by the corporation, as the taxpayer expected, and he sold them in one instance to a friend for a price less than par so that the gain would be realized as a gain from sale taxable as a long term capital gain and in three instances for par, after which the purchaser would receive a dividend. When the shares were redeemed, the taxpayer had sold them and was not the owner, and the purchasers received the redemption price from the corporation. Held, the gain of the taxpayer was taxable as a…
1Opinion of the Court
OPINION.
Sternhagen, Judge:
The Commissioner’s ground for the deficiency is his determination that the gain realized by the petitioner in his disposition of the Enterprise shares in the four transactions was a short term liquidation gain in the redemption of the shares, taxable under section 115 (c) and (i). The petitioner contends that as a matter of fact he sold each of the four blocks of Enterprise shares after* he had held them for more than twenty-four months, and that the gain which he realized was therefore a long term capital gain, taxable under section 117 (a) (4) and (b).
In our…
2Cases cited4 opinions
- Gregory v. HelveringSupreme Court of the United States · 1935
- Higgins v. SmithSupreme Court of the United States · 1940
- Griffiths v. CommissionerSupreme Court of the United States · 1939
- Helvering v. American Dental Co.Supreme Court of the United States · 1943
3Cited by37 opinions
- Sun Properties, Inc. v. United StatesCourt of Appeals for the Fifth Circuit · 1955
- South Texas Rice Warehouse Co. v. CommissionerUnited States Tax Court · 1965
- E. Keith Owens v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1977
- Granite Trust Company v. United StatesCourt of Appeals for the First Circuit · 1956
- Apt v. BirminghamDistrict Court, N.D. Iowa · 1950
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