Maggard v. Commissioner

T.C. Memo. 2024-77 (2024)

From our private database of 47,500+ case briefs, written and edited by humans—never with AI.

Maggard v. Commissioner

United States Tax Court
T.C. Memo. 2024-77 (2024)

  • Written by Nathan Benedict, JD

Facts

James Maggard (plaintiff) and Todd Schricker founded Schricker Engineering Corporation (SE Corp), an S corporation. Each owned half of SE Corp stock. The corporation’s bylaws described all shares as belonging to the same class. Schricker sold his shares to Maggard, who later sold a 60 percent stake in SE Corp to two individuals, LL and WJ. Under the corporation’s governing documents, each party was entitled to a proportionate share of SE Corp’s distributions. However, LL and WJ made disproportionate distributions to themselves. Maggard eventually learned of this and sued LL and WJ. The court found for Maggard and ordered SE Corp to make a corrective distribution of $164,783 to Maggard. LL and WJ eventually settled, buying out Maggard’s entire stake rather than making the distribution. The Internal Revenue Service (IRS) (defendant) sought to tax Maggard on the pro rata share of SE Corp’s income that he should have received.

Rule of Law

Issue

Holding and Reasoning (Holmes, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 968,000 law students since 2011. Some law schools even subscribe directly to Quimbee for all their law students.

    Unlock this case briefRead our student testimonials

  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.

    Learn about our approachRead more about Quimbee

Here's why 968,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 47,500 briefs, keyed to 1,007 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.
  • AI-generated podcast version of every brief — listen on the go, between classes, or whenever reading isn’t an option. New

Access this case brief for FREE

With a 7-day free trial membership
Here's why 968,000 law students have relied on our case briefs:
  • Reliable - written by law professors and practitioners, not other law students
  • The right length and amount of information - includes the facts, issue, rule of law, holding and reasoning, and any concurrences and dissents
  • Access in your class - works on your mobile and tablet
  • 47,500 briefs - keyed to 1,007 casebooks
  • Uniform format for every case brief
  • Written in plain English - not in legalese and not just repeating the court's language
  • Massive library of related video lessons - and practice questions
  • Top-notch customer support

Access this case brief for FREE

With a 7-day free trial membership

Casebooks

Corporate and Partnership Tax

Key Terms

  • S CorporationA closely held corporation that makes an election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code.
  • Pass-Through EntityA business entity, such as a limited partnership or an S Corporation, that files its own tax return but whose tax items flow up to its owners, who claim pro-rata shares of the entity’s gain and loss on their personal returns.

Understand your casebook readings in seconds

Use our case briefs to comprehend your casebook readings faster, supplement your notes and outlines, and outshine your peers in class.

Get instant access to over 47,500+ expert-written case briefs in a searchable database keyed to 1,007 law school casebooks.

Case book preview
Start your free 7-day trial