Rosen v. Commissioner
United States Tax Court
Petitioner transferred all the assets and liabilities of a sole proprietorship to a corporation in which he owned 100 percent of the issued and outstanding stock. At the time of the transfer, the liabilities exceeded the assets and the corporation was, in fact, insolvent. Thereafter, petitioner unsuccessfully sought additional capital for the corporation. Petitioner at all times remained liable for the liabilities transferred to the corporation.
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Petitioner transferred all the assets and liabilities of a sole proprietorship to a corporation in which he owned 100 percent of the issued and outstanding stock. At the time of the transfer, the liabilities exceeded the assets and the corporation was, in fact, insolvent. Thereafter, petitioner unsuccessfully sought additional capital for the corporation. Petitioner at all times remained liable for the liabilities transferred to the corporation. Held: Petitioner nevertheless realized gain under sec. 357(c) to the extent that the liabilities assumed exceeded his adjusted basis in the assets…
1Opinion of the Court
Quealy, Judge:
The respondent determined deficiencies in the Federal income tax of the petitioners for the taxable years 1965 and 1967 in the amounts of $8,481.33 and $87,010.81, respectively.
The principal issue for our determination is whether petitioner, David Rosen, realized gain under section 357(c)1 in the taxable year 1967, on the transfer of all the assets and liabilities of his sole proprietorship to a corporation, in which he owned 100 percent of the outstanding stock, to the extent that the liabilities assumed exceeded his adjusted basis in the assets transferred.
The resolution of…
2Cases cited4 opinions
- Bolger v. CommissionerUnited States Tax Court · 1973
- Raich v. CommissionerUnited States Tax Court · 1966
- John P. And Alice Bongiovanni v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1972
- Thatcher v. CommissionerUnited States Tax Court · 1973
3Cited by18 opinions
- Smith v. CommissionerUnited States Tax Court · 1985
- Lessinger v. CommissionerUnited States Tax Court · 1985
- Focht v. CommissionerUnited States Tax Court · 1977
- Sol Lessinger and Edith Lessinger v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1989
- Caracci v. C.I.R.Court of Appeals for the Fifth Circuit · 2006
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