Nordberg v. Commissioner
United States Tax Court
S Corp. made a pro rata distribution of $ 800,000 to the holders of the $ 4 million issue of its "6 percent Subordinated Notes" in partial "repayment of the principal amount" of such notes. T was the owner of $ 500,000 of those notes and received $ 100,000 as his share of that distribution.
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S Corp. made a pro rata distribution of $ 800,000 to the holders of the $ 4 million issue of its "6 percent Subordinated Notes" in partial "repayment of the principal amount" of such notes. T was the owner of $ 500,000 of those notes and received $ 100,000 as his share of that distribution. Held: T realized capital gain measured by the difference between the amount received and his basis in the notes, notwithstanding that under the agreement pursuant to which the distribution was made, it was recognized that a claim or claims could possibly be asserted by others (possibly other creditors of S…
1Opinion of the Court
Raum, Judge:
The Commissioner determined an income tax deficiency of $4,396.29 against petitioners Paul and Debra Nordberg for the taxable year ended December 31, 1978. Petitioners, in addition to disputing the deficiency, claim an overpayment of $5,186.26 in income taxes paid for 1978.1 In respect of both the deficiency and the asserted overpayment, the only issue for decision is whether $100,000 received by Paul Nordberg in 1978 was a loan or was a partial payment on certain notes in which he held an interest, resulting in the receipt of taxable gain to the extent that the amount received…
2Cases cited8 opinions
- North American Oil Consolidated v. BurnetSupreme Court of the United States · 1932
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- Hope v. CommissionerUnited States Tax Court · 1971
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