W. A. Drake, Inc. v. Commissioner
United States Tax Court
Petitioner owned several farms which were heavily encumbered. It desired to reduce the amount of interest payable. It entered into contracts to sell two farms to one of its stockholders, who owned, directly or indirectly, more than 50 percent of its stock. The principal consideration paid for the farms was petitioner's stock, which it thereafter carried as treasury stock.
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Petitioner owned several farms which were heavily encumbered. It desired to reduce the amount of interest payable. It entered into contracts to sell two farms to one of its stockholders, who owned, directly or indirectly, more than 50 percent of its stock. The principal consideration paid for the farms was petitioner's stock, which it thereafter carried as treasury stock. After the sale, which was made at a loss, the stockholder no longer owned 50 percent of petitioner's stock. Held, that the loss may not be allowed because of the provisions of section 24, I. R. C.
1Opinion of the Court
W. A. Drake, Inc., Petitioner, v. Commissioner of Internal Revenue, Respondent
W. A. Drake, Inc. v. Commissioner
Docket No. 1278
United States Tax Court
3 T.C. 33; 1944 U.S. Tax Ct. LEXIS 222;
January 15, 1944, Promulgated
Decision will be entered for the respondent.
Petitioner owned several farms which were heavily encumbered. It desired to reduce the amount of interest payable. It entered into contracts to sell two farms to one of its stockholders, who owned, directly or indirectly, more than 50 percent of its stock. The principal consideration paid for the farms was petitioner's stock, which it…
2Cases cited9 opinions
- Higgins v. SmithSupreme Court of the United States · 1940
- Lucas v. North Texas Lumber Co.Supreme Court of the United States · 1930
- W. A. Drake, Inc. v. CommissionerUnited States Tax Court · 1944
- Stelson v. HaiglerSupreme Court of Colorado · 1917
- Morath v. PerkinsSupreme Court of Colorado · 1929
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