McGlothlin v. Commissioner
United States Tax Court
Petitioner was the principal shareholder of P corporation. As a part of a merger whereby T corporation would acquire the stock of P corporation, petitioner executed a "guaranty agreement" undertaking to guarantee the $ 1,098,414.14 market value of three ranch properties owned by P corporation. When T corporation was unable to sell the properties, petitioner performed on his obligation and expended $ 261,968.74 to acquire the properties personally.
Read the full summary
Petitioner was the principal shareholder of P corporation. As a part of a merger whereby T corporation would acquire the stock of P corporation, petitioner executed a "guaranty agreement" undertaking to guarantee the $ 1,098,414.14 market value of three ranch properties owned by P corporation. When T corporation was unable to sell the properties, petitioner performed on his obligation and expended $ 261,968.74 to acquire the properties personally. Held: The payment of $ 261,968.74 did not constitute a deductible loss under section 165 (c)(2), I.R.C. 1954. The transaction was not entered into…
1Opinion of the Court
Train, Judge:
Respondent determined a deficiency in petitioners’ income tax for the taxable year ended May 31,1959, in the amount of $218,990.05. Petitioners’ initial objection that respondent’s action is barred by the statute of limitations was conceded by them in the reply brief. The parties agree that the only issue remaining for decision is whether a payment by petitioner Ray McGlothlin of the sum of $261,968.74 to Texas Calgary Co. during the taxable year in question gave rise to a deductible loss under section 165(c) (2), I.R.C. 1954.
FINDINGS OF FACT
A stipulation of facts, and the…
2Cases cited13 opinions
- Helvering v. National Grocery Co.Supreme Court of the United States · 1938
- WD Haden Co. v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1948
- James E. Austin and Elizabeth G. Austin v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1962
- Lloyd-Smith v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1941
- Austin v. CommissionerUnited States Tax Court · 1960
8 more not listed; retrieve them via the Exa API.
3Cited by11 opinions
- Markwardt v. CommissionerUnited States Tax Court · 1975
- Horne v. CommissionerUnited States Tax Court · 1972
- Anderson v. CommissionerUnited States Tax Court · 1971
- Siple v. CommissionerUnited States Tax Court · 1970
- Nelson v. CommissionerUnited States Tax Court · 1971
6 more not listed; retrieve them via the Exa API.