Zabolotny v. Commissioner
United States Tax Court
Petitioners owned a tract of land in North Dakota which they used for farming purposes. Oil was discovered under the land. Petitioners leased the mineral rights to Gulf Oil Corporation in return for sizable royalties. On May 20, 1981, petitioners incorporated their farming operation on the land. The corporation established an Employee Stock Ownership Plan (ESOP) for its employees.
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Petitioners owned a tract of land in North Dakota which they used for farming purposes. Oil was discovered under the land. Petitioners leased the mineral rights to Gulf Oil Corporation in return for sizable royalties. On May 20, 1981, petitioners incorporated their farming operation on the land. The corporation established an Employee Stock Ownership Plan (ESOP) for its employees. Petitioners then sold their initial interest in the land to the ESOP in exchange for payments to be received from a joint and survivor annuity plan established by the ESOP for the benefit of petitioners. Respondent…
1DissentBeghe, J.
I generally share the view of my colleagues that we should not disregard the terms in which the parties have chosen to present their case, and that taxpayers should usually be held to the form of the transaction they have chosen. However, the unsatisfactory result of the majority decision impels me to look for an alternative characterization of the transaction by which confiscatory liabilities for section 4975 excise taxes may be avoided.1
I would reopen the record to receive evidence on the qualification of the trust from its inception. I would also consolidate this case for consideration on…
2Cases cited10 opinions
- Gregory v. HelveringSupreme Court of the United States · 1935
- Bob Jones University v. United StatesSupreme Court of the United States · 1983
- Malat v. RiddellSupreme Court of the United States · 1966
- Pinellas Ice & Cold Storage Co. v. CommissionerSupreme Court of the United States · 1933
- Lazarus v. CommissionerUnited States Tax Court · 1972
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