Allport v. Commissioner
United States Tax Court
The acquisition in 1940 by a corporation of its shares for purpose of retirement is within section 115 (i) and (c), Internal Revenue Code, treating the gain to the shareholder as short term capital gain no matter how long shares were held by him and regardless of plan for expansion or nonliquidation of corporate business, since partial liquidation under the statute refers literally to a distribution in cancellation or redemption of a part of the corporate shares.
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The acquisition in 1940 by a corporation of its shares for purpose of retirement is within section 115 (i) and (c), Internal Revenue Code, treating the gain to the shareholder as short term capital gain no matter how long shares were held by him and regardless of plan for expansion or nonliquidation of corporate business, since partial liquidation under the statute refers literally to a distribution in cancellation or redemption of a part of the corporate shares. Shareholder's lack of knowledge of corporate intent to retire stock is immaterial.
1Opinion of the Court
OPINION.
SteRnhagen, -Judge:
The Commissioner’s determination is based upon the definition of partial liquidation contained in section 115 (i) of the Internal Revenue Code1 and treats the gain of $5,150 as a short term capital gain as required by section 115 (c), providing: “Despite the provisions of section 117, the gain so recognized shall be considered as a short-term capital gain, except * *" (The exception is irrelevant.) The effect of this was to subject all of the gain to tax. The petitioner assails this and demands, under section 117 (b), that the gain be recognized only to the extent…
2Cited by30 opinions
- R. D. Merrill Co. v. CommissionerUnited States Tax Court · 1945
- Gravois Planing Mill Company, Charles A. And Florence Beckemeier v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1962
- Beard v. CommissionerUnited States Tax Court · 1945
- Bowers v. CommissionerUnited States Tax Court · 1955
- Union Starch & Refining Co. v. CommissionerUnited States Tax Court · 1959
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