Ford v. United States
United States Court of Claims
311 F.2d 951 (1963)
- Written by Eric Miller, JD
Facts
W. F. Taylor Company, Inc. (the corporation) owned the Free State Plantation (the plantation). The corporation was liquidated in 1936, causing the distribution of the plantation to shareholders Frank and Amanda Ford (plaintiffs). The Fords also assumed the corporation’s liabilities, which totaled $150,000. The Fords paid a capital-gain tax that was based on the difference between their basis in the corporation’s stock, $25,000, and the market value of the plantation, $250,000, minus the $150,000 in liabilities. In 1955 the Fords sold the plantation for $750,000. By this point, the $150,000 in liabilities had been discharged. When the Fords reported their capital gains for the sale of the plantation, they used $400,000 as their basis—the market value of the plantation at the time of liquidation plus the corporate liabilities assumed at that time. The Commissioner of Internal Revenue asserted deficiencies. The Fords brought an action in the United States Court of Claims.
Rule of Law
Issue
Holding and Reasoning (Per curiam)
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