Byrd v. Commissioner
United States Tax Court
Petitioners are transferees. As shareholders of transferor, they sold all of the stock of transferor, a subchapter S corporation, to a third party in March of 1980 and the transferor was liquidated. Transferor, a corporation engaged in the nursery business, had deducted in prior years the expenses of growing plants which remained in its inventory of plants at the time of liquidation.
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Petitioners are transferees. As shareholders of transferor, they sold all of the stock of transferor, a subchapter S corporation, to a third party in March of 1980 and the transferor was liquidated. Transferor, a corporation engaged in the nursery business, had deducted in prior years the expenses of growing plants which remained in its inventory of plants at the time of liquidation. Held, the value of the inventory of plants which were transferred to the purchaser must be included in the income of the transferor, and hence the petitioners, in 1980 under the tax benefit rule.
1Opinion of the Court
OPINION
DRENNEN, Judge:
These cases have been consolidated for trial pursuant to Rule 141. 1 Respondent determined a deficiency in the Federal income tax of Eastern Shore Nursery of Virginia, Inc. (Eastern Shore or the corporation), for the taxable year 1980 of $113,480.62. Petitioners are liable for this deficiency as transferees of the assets of Eastern Shore. Respondent issued notices of transferee liability to each petitioner for the above deficiency on June 14, 1984. It is stipulated and found that petitioners are transferees at law and in equity of assets of Eastern Shore, within the…
2Cases cited4 opinions
- Hillsboro National Bank v. CommissionerSupreme Court of the United States · 1983
- Block v. CommissionerUnited States Board of Tax Appeals · 1939
- Union Trust Co. v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1940
- Ballou Const. Co., Inc. v. United StatesDistrict Court, D. Kansas · 1985
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