Focht v. Commissioner
United States Tax Court
Petitioner transferred all of the assets and liabilities of his sole proprietorship to a corporation in exchange for all the stock of such corporation. The sum of the liabilities assumed by the corporation exceeded the total adjusted basis of the proprietorship's assets transferred. Held, an obligation to the extent that its payment would have been deductible if made by petitioner shall not, for purposes of secs. 357 and 358, be treated as a liability.
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Petitioner transferred all of the assets and liabilities of his sole proprietorship to a corporation in exchange for all the stock of such corporation. The sum of the liabilities assumed by the corporation exceeded the total adjusted basis of the proprietorship's assets transferred. Held, an obligation to the extent that its payment would have been deductible if made by petitioner shall not, for purposes of secs. 357 and 358, be treated as a liability. Held, further, the amount of unreported rental income and various unsubstantiated deductions determined.
1Opinion of the Court
Donald D. Focht, Petitioner v. Commissioner of Internal Revenue, Respondent
Focht v. Commissioner
Docket No. 7807-73
United States Tax Court
68 T.C. 223; 1977 U.S. Tax Ct. LEXIS 105;
May 24, 1977, Filed
Decision will be entered under Rule 155.
Petitioner transferred all of the assets and liabilities of his sole proprietorship to a corporation in exchange for all the stock of such corporation. The sum of the liabilities assumed by the corporation exceeded the total adjusted basis of the proprietorship's assets transferred. Held, an obligation to the extent that its payment would have been deductible…
Also in this document: Concurrence · Simpson; Concurrence · Wilbur; Dissent · Tannenwald; Dissent · Hall.
2Cases cited29 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Church of the Holy Trinity v. United StatesSupreme Court of the United States · 1892
- Jack E. Golsen and Sylvia H. Golsen v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1971
- Crane v. CommissionerSupreme Court of the United States · 1947
- Henslee v. Union Planters National Bank & Trust Co.Supreme Court of the United States · 1949
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