¶1dissenting: I am unable to agree with the holding of the majority that the cancellation of the petitioner’s indebtedness to tbe corporation in tbe amount of $44,625.79 constituted an “assumption” of such indebtedness within tbe meaning of section 357 of the Internal Revenue Code of 1954. Rather, as a result of the cancellation the petitioner was in receipt of “other property or money” in the amount of the debt and therefore the gain on the overall transaction must, under section 351, be recognized, but not in excess of such “other property or money.” Section 357(c) (1) has no application since the indebtedness to third parties which was assumed by the corporation did not exceed the adjusted basis of the assets transferred.
39 T.C. 553
Kniffen v. Commissioner
Decided December 20, 1962
United States Tax Court · decided 1962-12-20
1. Held, that the transfer by petitioner Arthur Kniffen in 1957 of his sole proprietorship assets and liabilities (including a $ 44,625.79 liability owing to his transferee… Held: that the transfer by petitioner Arthur Kniffen in 1957 of his sole proprietorship assets and liabilities (including a $ 44,625.79 liability owing to his transferee corporation) to his controlled corporation constituted a partially taxable exchange under sections 351 and 357, I.R.C. 1954. 2.
Applies 26 U.S.C. § 357
Good law ✅— No negative treatment on recordhow we know
Decision will be entered under Rule 50 · Decided 1962-12-20
How this case has been cited
Cited by 18 later decisions — most recently April 2006
1 federal appellate ·
Later decisions citing this case, by decade. The current decade is in progress, and our corpus holds fewer opinions from the most recent years, so the latest bars are undercounted — not a real decline.
View the full empirical analysis of this case →