Cullen v. Commissioner
United States Tax Court
1. Petitioner, the sole active stockholder, owning 25 per cent of the capital stock in a corporation, bought all of the stock in order to liquidate the corporation and operate the business as a sole proprietorship. He paid substantially more for the stock than the known fair market value or book value of the tangible assets. Following the purchase of the stock he immediately liquidated the corporation. The corporation had no intangible assets.
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1. Petitioner, the sole active stockholder, owning 25 per cent of the capital stock in a corporation, bought all of the stock in order to liquidate the corporation and operate the business as a sole proprietorship. He paid substantially more for the stock than the known fair market value or book value of the tangible assets. Following the purchase of the stock he immediately liquidated the corporation. The corporation had no intangible assets. Held, petitioner realized a long term capital gain based on the difference between the original cost of his 25 per cent of the stock and the fair…
1Opinion of the Court
OPINION.
LeMure, Judge:
The first question we must determine is whether respondent erred in his determination that the petitioners received assets having a fair market value of $42,143 upon the liquidation of Charles C. Cullen & Co., a corporation in which the petitioners were the sole stockholders.
The petitioners contend that the payment of an amount in excess of the book value of the stock does not establish a fair market value for the assets of the corporation because the tangible assets had no value in excess of their book value and the corporation had no intangible assets of value.…
2Cases cited3 opinions
- Kimbell-Diamond Milling Co. v. Comm'rUnited States Tax Court · 1950
- MacDonald v. CommissionerUnited States Tax Court · 1944
- Lawton v. CommissionerUnited States Tax Court · 1946
3Cited by9 opinions
- J. E. Davant and Kathryn Davant v. Commissioner of Internal Revenue, Commissioner of Internal Revenue v. J. E. Davant and Kathryn DavantCourt of Appeals for the Fifth Circuit · 1966
- Martin Ice Cream Co. v. Comm'rUnited States Tax Court · 1998
- United States v. CornishCourt of Appeals for the Ninth Circuit · 1965
- Owen v. United StatesDistrict Court, D. Nebraska · 1951
- Mattison v. United StatesDistrict Court, D. Idaho · 1958
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