Bleily & Collishaw, Inc. v. Commissioner
United States Tax Court
72 T.C. 751 (1979), 647 F.2d 169 (1981)
- Written by Heather Ryfa, JD
Facts
Ray Collishaw owned all shares of Bleily & Collishaw, Inc. (B&C) (plaintiff). B&C bought shares of Maxdon Construction, Inc. (Maxdon). The two companies had a preexisting business relationship in the construction industry. Donald Neumann, Maxdon’s president and controlling shareholder, wanted sole control and ownership of Maxdon. Collishaw offered to sell all of the Maxdon stock back to Neumann for $200 per share. Neumann did not have enough money to purchase all of the stock, so Maxdon redeemed the shares at $200 per share from B&C over a 23-week period. B&C claimed the redemption amounts as a dividend. The commissioner of the Internal Revenue Service (defendant) assessed additional taxes due to classifying the transactions as sales of stock taxable as capital gains. B&C appealed the assessment to the United States Tax Court.
Rule of Law
Issue
Holding and Reasoning (Irwin, J.)
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