McLaulin v. Commissioner
United States Tax Court
Ps' "S corporation", A, owned 50 percent of the stock of corporation B, a "C corporation". B redeemed individual H's 50- percent stock interest in B for cash and real property. On the previous day, B had borrowed from A an amount exceeding the cash consideration and representing over 96 percent of the total consideration paid to H for his stock.
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Ps' "S corporation", A, owned 50 percent of the stock of corporation B, a "C corporation". B redeemed individual H's 50- percent stock interest in B for cash and real property. On the previous day, B had borrowed from A an amount exceeding the cash consideration and representing over 96 percent of the total consideration paid to H for his stock. On the same day as the redemption, A distributed its then 100-percent stock interest in B to Ps in a transaction intended to qualify as a tax-free spinoff under sec. 355(a)(1) and (c)( 1), I.R.C. HELD: Because A's distribution of the stock of B…
1Opinion of the Court
Hat .pern, Judge:
These consolidated cases involve the following determinations by respondent of deficiencies in petitioners’ Federal income taxes for 1993:
Petitioner Deficiency
Douglas P. McLaulin, Jr. $97,244
Augustus H. King III . 97,124
Alfred E. and Lynn B. Holland . 97,244
Unless otherwise indicated, all section references are to the Internal Revenue Code in effect for the year in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure. Petitioners bear the burden of proof. See Rule 142(a).
After concessions, the only issue for decision is whether the January 15,…
2Cases cited17 opinions
- United States v. Security Trust & Savings BankSupreme Court of the United States · 1950
- Irwin v. GavitSupreme Court of the United States · 1925
- Jasionowski v. CommissionerUnited States Tax Court · 1976
- General Utilities & Operating Co. v. HelveringSupreme Court of the United States · 1935
- Commissioner v. GordonSupreme Court of the United States · 1968
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- Douglas P. McLaulin, Jr. v. CommissionerUnited States Tax Court · 2000
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