Study Aids
Case Briefs Overview
Casebooks
Case Briefs
S

Seda v. Commissioner

82 T.C. 484 (1984)

From our private database of 46,500+ case briefs, written and edited by humans—never with AI.

Seda v. Commissioner

United States Tax Court
82 T.C. 484 (1984)

  • Written by Heather Whittemore, JD

Facts

Mr. and Mrs. Seda (plaintiffs) owned B & B Supply Company (the company). Mr. Seda was the president and chairman of the board, and Mrs. Seda was a director, vice president, and secretary. By 1959 the Sedas owned all 23,920 shares of the company’s stock. In 1979 the Sedas’ son, James L. Seda, took control of the company. The Sedas resigned from their positions and terminated their ownership of the company. The company redeemed the stock owned by the Sedas at $12.50 per share, for a total of $299,000. The company also issued 1,000 shares of stock to James for $1,000. Mr. Seda continued to work for the company at a salary of $1,000 per month for two years after the redemption. The Sedas reported the money they received from the stock redemption as a long-term capital gain. The Commissioner of Internal Revenue (the Commissioner) (defendant) assessed a deficiency against the Sedas. The Commissioner reasoned that because Mr. Seda continued to work for the company after the stock redemption, the stock in the company owned by James was constructively owned by Mr. Seda, and the redemption was not a complete redemption. As a result, the money received from the redemption was a dividend that should have been taxed as ordinary income. The Sedas appealed.

Rule of Law

Issue

Holding and Reasoning (Fay, J.)

Concurrence (Whitaker, 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 832,000 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 832,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 46,500 briefs, keyed to 994 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.

Access this case brief for FREE

With a 7-day free trial membership
Here's why 832,000 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
  • 46,500 briefs - keyed to 994 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