McDonald v. Commissioner
United States Tax Court
1. The petitioner, who owned all of the outstanding nonvoting preferred stock of E & M and substantially all of its outstanding common stock, entered into an agreement with Borden, under which E & M redeemed his preferred stock at par and thereafter Borden acquired all of E & M's outstanding stock in exchange for its own stock.
Read the full summary
1. The petitioner, who owned all of the outstanding nonvoting preferred stock of E & M and substantially all of its outstanding common stock, entered into an agreement with Borden, under which E & M redeemed his preferred stock at par and thereafter Borden acquired all of E & M's outstanding stock in exchange for its own stock. Held, the redemption of the petitioner's preferred stock was not essentially equivalent to a dividend. 2. The petitioner failed to show that he is entitled to any part of a deduction for legal fees disallowed by the respondent.
1Opinion of the Court
Arthur D. McDonald and Jessie L. McDonald, Petitioners v. Commissioner of Internal Revenue, Respondent
McDonald v. Commissioner
Docket No. 429-67
United States Tax Court
52 T.C. 82; 1969 U.S. Tax Ct. LEXIS 154;
April 16, 1969, Filed
Decision will be entered under Rule 50.
1. The petitioner, who owned all of the outstanding nonvoting preferred stock of E & M and substantially all of its outstanding common stock, entered into an agreement with Borden, under which E & M redeemed his preferred stock at par and thereafter Borden acquired all of E & M's outstanding stock in exchange for its own stock.…
2Cases cited5 opinions
- Zenz v. QuinlivanCourt of Appeals for the Sixth Circuit · 1954
- Northup v. United StatesCourt of Appeals for the Second Circuit · 1957
- United States v. Gerald and Gladys CareyCourt of Appeals for the Eighth Circuit · 1961
- McDonald v. CommissionerUnited States Tax Court · 1969
- Blount v. CommissionerUnited States Tax Court · 1969