Cox v. Commissioner
United States Tax Court
Petitioners owned 100 percent of the stock of RCI and New Roanoke. On Jan. 2, 1974, petitioners sold all of their New Roanoke stock to RCI in exchange for five notes, in the amount of $ 20,000 each, payable beginning in 1975. RCI had no earnings and profits at the time. Petitioners realized $ 98,000 long-term capital gain from the transaction.
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Petitioners owned 100 percent of the stock of RCI and New Roanoke. On Jan. 2, 1974, petitioners sold all of their New Roanoke stock to RCI in exchange for five notes, in the amount of $ 20,000 each, payable beginning in 1975. RCI had no earnings and profits at the time. Petitioners realized $ 98,000 long-term capital gain from the transaction. Held, sec. 304(a)(1), I.R.C. 1954, recast the stock sale as a contribution to capital followed by a redemption distribution to which sec. 301 applies and thus no "sale" took place under sec. 453. Held, further, sec. 301(c)(3)(A) only characterizes the…
1Opinion of the Court
OPINION
Irwin, Judge:
By letter dated June 5, 1978, respondent has determined a deficiency of $12,428 in petitioners’ 1974 Federal income taxes. After concessions, the sole issue for decision is whether petitioners are entitled to elect to report their gain from a sale1 of stock under section 453.2
This case was submitted without trial pursuant to Rule 122, Tax Court Rules of Practice and Procedure. The stipulation of facts and exhibits attached thereto are incorporated herein by this reference.
Petitioners Rufus K. Cox, Jr., and Ethel M. Cox, husband and wife, resided in Roanoke, Va., when they…
2Cases cited21 opinions
- Griffiths v. CommissionerSupreme Court of the United States · 1939
- Avery v. CommissionerSupreme Court of the United States · 1934
- United States v. DavisSupreme Court of the United States · 1970
- Burnet v. S. & L. Building Corp.Supreme Court of the United States · 1933
- The Cappel House Furnishing Company v. United StatesCourt of Appeals for the Sixth Circuit · 1957
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3Cited by8 opinions
- Stanley H. Brams v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1984
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- Cox v. CommissionerUnited States Tax Court · 1982
- Estate of Zimmerman v. CommissionerUnited States Tax Court · 1985
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