Ludwig v. Commissioner
United States Tax Court
Petitioner, a United States citizen, was the sole stockholder of Oceanic, a controlled foreign corporation. Petitioner borrowed $ 100,538,775 from a group of banks and pledged his stock in Oceanic as part of the collateral for the loan. Held, Oceanic was not a "guarantor" of petitioner's loan within the meaning of sec. 956(c), I.R.C. 1954, and, thus, petitioner did not realize taxable income from Oceanic under sec. 951 as a result of the loan transaction.
1Opinion of the Court
Featherston, Judge:
Respondent determined a deficiency in petitioners’ Federal income tax for 1963 in the amount of $4,438,086.75. After various concessions by the parties, the sole issue remaining for decision is whether a controlled foreign corporation wholly owned by petitioner Daniel K. Ludwig was a guarantor, within the meaning of section 956(c),1 of petitioner’s obligations to a group of lending banks, with the result that income was realized by petitioner under section 951.
FINDINGS OF FACT
Petitioners Daniel K. Ludwig (hereinafter petitioner) and Gertrude V. Ludwig, husband and wife, are…
2Cases cited25 opinions
- Hanover Bank v. CommissionerSupreme Court of the United States · 1962
- Koshland v. HelveringSupreme Court of the United States · 1936
- Helvering v. Wilshire Oil Co.Supreme Court of the United States · 1939
- Fribourg Navigation Co. v. CommissionerSupreme Court of the United States · 1966
- Morris G. Underwood and Jackie Underwood, Individuals v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1976
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3Cited by21 opinions
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- Neuhoff v. CommissionerUnited States Tax Court · 1980
- Ashland Oil, Inc. v. CommissionerUnited States Tax Court · 1990
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