Shunk v. Commissioner
United States Tax Court
The trust estate, taxable as a corporation, sold its assets and business to a partnership composed of the three beneficiaries and two employees who were not beneficiaries. The selling price was the book value of the assets at the close of the fiscal year 1940. No value for good will was carried on the books of the company. The partnership continued the business under the same name.
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The trust estate, taxable as a corporation, sold its assets and business to a partnership composed of the three beneficiaries and two employees who were not beneficiaries. The selling price was the book value of the assets at the close of the fiscal year 1940. No value for good will was carried on the books of the company. The partnership continued the business under the same name. Held, the trust estate transferred good will to the partnership which had a fair market value of $ 110,194.80; held, further, long term notes given to the trust estate had a fair market value equal to their…
1Opinion of the Court
OPINION.
ARNOLD, Judge:
In his brief respondent contends that the business and assets transferred by the trust estate to the partnership had a fair market value of $639,372.94.1 He contends, further, that the trust estate received only $382,040.26 as consideration therefor, and that the difference of $257,332.68 was, in effect, a taxable distribution to the beneficiaries of the trust estate under sections 22 (a) and 115 (a) of the Internal Revenue Code. He points to the trust estate’s undistributed earnings and profits on November 1, 1940, of not less than $276,988.48 as proof of its ability to…
2Cases cited3 opinions
- Palmer v. CommissionerSupreme Court of the United States · 1937
- Toledo Newspaper Co. v. CommissionerUnited States Tax Court · 1943
- Lawton v. CommissionerUnited States Tax Court · 1946
3Cited by2 opinions
- Apt v. BirminghamDistrict Court, N.D. Iowa · 1950
- Shunk v. CommissionerUnited States Tax Court · 1948