Taproot Admin. Servs. v. Comm'r
United States Tax Court
R determined that P is ineligible for S corporation status in 2003 because its shareholder was a Roth individual retirement account (Roth IRA). As a consequence, R determined that P is taxable as a C corporation for 2003. Held: The Roth IRA is not an eligible S corporation shareholder. P is taxable as a C corporation for 2003.
1DissentHolmes, J.
In 2003, there were 2500 shares of stock in Taproot Administrative Services, Inc., titled “First Trust Company of Onega, as custodian for Paul DiMundo.” A regulation states that “[t]he person for whom stock of a corporation is held by a * * * custodian * * * is considered to be the shareholder of the corporation.”1 The First Trust Company of Onega is a custodian. DiMundo would therefore seem to be the person who is considered to be Taproot’s shareholder.2 Since he is undoubtedly an individual, why exactly is it that Taproot is disqualified from being an S corporation? If enough commentators…
2Cases cited37 opinions
- Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc.Supreme Court of the United States · 1984
- Patterson v. McLean Credit UnionSupreme Court of the United States · 1989
- Central Bank of Denver, N. A. v. First Interstate Bank of Denver, N. A.Supreme Court of the United States · 1994
- Wyeth v. LevineSupreme Court of the United States · 2009
- Brown v. GardnerSupreme Court of the United States · 1994
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