Frederick Weisman Co. v. Commissioner
United States Tax Court
As a condition for obtaining a 5-year automobile distributorship from TMS, P redeemed its outstanding shares from all but one shareholder.
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As a condition for obtaining a 5-year automobile distributorship from TMS, P redeemed its outstanding shares from all but one shareholder. The distributorship was necessary for the survival of P. Held, applying the "origin and nature" of the transaction test, neither the amount paid for the stock nor the incidental expenses incurred in connection with the redemption are deductible under sec. 162(a), I.R.C.Held further, both the purchase price of the stock and the incidental expenses in connection with the redemption are nondeductible capital expenditures. Five Star Mfg. Co. v. Commissioner,…
1Opinion of the Court
OPINION
PARKER, Judge:
Respondent determined the following deficiencies in petitioner’s Federal corporate income taxes:
TYE
Aug. 31, 1983 Aug. 31, 1984 Aug. 31, 1985
Deficiency
$1,013,859
1,127,357
1,093,266
Unless otherwise indicated, all section references are to the Internal Revenue Code as amended and in effect for the taxable years at issue, and all Rule references are to the Tax Court Rules of Practice and Procedure.
The issue for decision is whether the amount paid by petitioner in redemption of its stock, when such redemption is brought about by an outside force and is necessary to the survival…
2Cases cited20 opinions
- Jack E. Golsen and Sylvia H. Golsen v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1971
- United States v. GilmoreSupreme Court of the United States · 1963
- Woodward v. CommissionerSupreme Court of the United States · 1970
- United States v. Hilton Hotels Corp.Supreme Court of the United States · 1970
- Arkansas Best Corp. v. CommissionerSupreme Court of the United States · 1988
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- Rogers v. United StatesDistrict Court, D. Kansas · 1999
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