Edward J. McCarthy and Lora R. McCarthy v. Joseph J. Conley, Jr., District Director of Internal Revenue for the Districtof Connecticut

BLUMENFELD, District Judge:

This is an appeal from a summary judgment adverse to the appellant in a .suit for refund of income taxes paid to satisfy deficiency assessments for the years 1954, 1955 and 1956. The taxpayer, Mrs. Lora McCarthy, 1 owned 1000 shares of the stock of The Andrew Radel ■Oyster Company, a family corporation, which she had acquired through inheritance. In December 1954, she sold her shares to the corporation which paid for them with liquid assets it had accumulated out of earnings and profits over a long period. It was the taxpayer’s use of a claimed loss on this…