Danenberg v. Commissioner
United States Tax Court
1. P was heavily in debt to B. As part of the settlement of such debt, P sold various items of collateral to third parties and transferred his stock in his wholly owned subch. S corporation to a nominee of B. He arranged that the proceeds of such dispositions be forwarded directly to B and applied to reduce his debt. After the liquidation of all P's collateral, B discharged P from any further liability on his indebtedness. P was insolvent at the time of such discharge.
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1. P was heavily in debt to B. As part of the settlement of such debt, P sold various items of collateral to third parties and transferred his stock in his wholly owned subch. S corporation to a nominee of B. He arranged that the proceeds of such dispositions be forwarded directly to B and applied to reduce his debt. After the liquidation of all P's collateral, B discharged P from any further liability on his indebtedness. P was insolvent at the time of such discharge. Held: The dispositions of the collateral by P were sales of such collateral, and P realized gain or loss on such sales…
1Opinion of the Court
Simpson, Judge:
The Commissioner determined a deficiency of $64,683.60 in the petitioners’ Federal income tax for 1971 and an addition to tax of $32,341.80 under section 6653(b) of the Internal Revenue Code of 1954.1 The Commissioner has conceded certain issues, and the issues remaining for decision are: (1) Whether the petitioners must recognize gain or loss as a result of the disposition of certain of their properties which had been given as collateral for their indebtedness even though they were insolvent at the time of such disposition; (2) whether the petitioner’s transfer of his stock in…
2Cases cited40 opinions
- Chris D. Stoltzfus and Irma H. Stoltzfus v. United StatesCourt of Appeals for the Third Circuit · 1968
- Bolen Webb and Cornelia Webb v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1968
- United States v. Kirby Lumber CoSupreme Court of the United States · 1931
- Helvering v. HammelSupreme Court of the United States · 1941
- Acker v. CommissionerUnited States Tax Court · 1956
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3Cited by51 opinions
- Frazier v. CommissionerUnited States Tax Court · 1998
- OKC Corp. v. CommissionerUnited States Tax Court · 1984
- Gehl v. CommissionerUnited States Tax Court · 1994
- Preslar v. CommissionerCourt of Appeals for the Tenth Circuit · 1999
- 2925 Briarpark, Ltd. v. CommissionerCourt of Appeals for the Fifth Circuit · 1999
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