Ingold v. Commissioner
This text of 10 T.C.M. 680 (Ingold v. Commissioner) is published on Counsel Stack Legal Research, covering United States Tax Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
*142 Petitioners, Ernest Ingold and his wife, Gene Ingold, pursuant to a transaction entered into between them and a corporation wholly owned by them, sold to the corporation securities which they had held for over six months. On the sale of some of these securities they realized gains, and on others, losses. Held, the losses sustained are unallowable as deductions, pursuant to
Memorandum Findings of Fact and Opinion
These cases were consolidated for hearing and decision. The respondent determined deficiencies in petitioners' income tax for 1944 as follows:
| Docket No. | Deficiency | |
| 24221 | Ernest Ingold | $1,672.15 |
| 24222 | Gene Ingold | 1,672.72 |
The question presented for decision is as follows:
Where petitioners, owners of all of the stock in a corporation, pursuant to a single transaction, sell to or exchange with that corporation certain securities, resulting in gains as to some of the securities*143 sold and losses as to others, is only the net gain realized taxable or are all the gains subject to tax and the losses unallowable as deductions under
Findings of Fact
Part of the facts were stipulated and are so found.
Petitioners are, and at all times hereinafter mentioned were, husband and wife, residing in California and maintaining their principal place of business at 999 Van Ness Avenue, San Francisco. They duly filed their individual income tax returns for the year 1944 with the collector of internal revenue for the first district of California.
During the taxable year ended December 31, 1944, the petitioners were the joint owners of all the capital stock of Ernest Ingold, Inc., a California corporation. On September 25, 1944, they contracted with this corporation for the purchase of two parcels of real property owned by the corporation. On one of such parcels of land there existed at that time a deed of trust held by the American Trust Company of San Francisco, which deed of trust was security for an outstanding loan to the corporation of $66,000. The petitioners agreed to assume this debt. They*144 paid the corporation $1,721.58 cash and gave it their promissory note for $62,500. In addition, they transferred to the corporation certain securities at a contract value of $134,908, which was the market value of these securities on September 30, 1944, as listed on the New York Stock Exchange. Previously these securities had been pledged by petitioners to a brokerage house, E. F. Hutton & Co., San Francisco, the payment of petitioners' debt to Hutton & Co. in the amount of $36,629.58. Ernest Ingold, Inc. assumed petitioners' debt to Hutton & Co.Hutton & Co. assented to the transfer of the securities and the assumption by Ernest Ingold, Inc. of petitioners' debt to it. The securities were valued on September 30, 1944, because October 1, 1944, was the date set by the parties for the passage of property interests in the real property and securities. The securities involved had been held by the petitioners for over six months prior to October 1, 1944. The securities which were sold, their cost to the petitioners, and their selling price (value September 30, 1944) are as follows:
| Selling Price | |||||
| No. of | Value on | Gain or | |||
| Security | Shares | Acquired | Cost | Sept. 30, 1944 | (Loss) |
| Alleghany Corporation | 400 | 12/23/39 | $ 350.00 | $ 950.00 | $ 600.00 |
| International | |||||
| Harvester | 100 | 3/ 5/31 | 5,685.00 | 7,987.50 | 2,302.50 |
| Pacific Gas & Electric | 462 | 1930-1-2 |