MILLER V. COMMISSIONER 75 T.C. 182 (1980) CASE BRIEF

MILLER V. COMMISSIONER

75 T.C. 182 (1980)

NATURE OF THE CASE: Miller (P) appealed a decision of IRS (D), which found a tax deficiency under 267 from the sale of a business and real property to P's brother.

FACTS: Ps are husband and wife. P and Marvin are the natural sons of Charles and Miriam Miller. Charles died in 1954. Under his will, all of his shares of stock in Charles Miller, Inc., being 20 of 21 outstanding shares, were left in equal shares to P and Marvin. The remaining share was owned by Miriam Miller. The corporation was engaged in the real estate and insurance brokerage business. Also left in equal shares to P and Marvin was certain real estate located at 2254 North Broad Street in Philadelphia, which was the location of the principal office of the corporation. After certain specific bequests to family members, the balance of Charles Miller's property was left in trust to his widow. P and Marvin jointly purchased additional parcels of real estate in Philadelphia. P was a student when his father died. He then worked part-time in the family business. Subsequently, he became a lawyer and has engaged in the practice of law. Marvin had been active in the family business before his father's death and has remained active in the business until the present time. A dispute arose and the sons could no longer get along. P and Marvin jointly purchased additional parcels of real estate in Philadelphia. P was a student when his father died. He then worked part-time in the family business. Subsequently, he became a lawyer and has engaged in the practice of law. Marvin had been active in the family business before his father's death and has remained active in the business until the present P claimed a long-term capital loss and ordinary losses resulting from the sales of the stock and the properties to his brother, Marvin.me. P sold his stock in Charles Miller, Inc., to Marvin and his interests in the parcels of real estate. D disallowed the claimed deductions for the losses on the ground that they were not allowable under the provisions of section 267. P petitioned.

ISSUE:

RULE OF LAW:

HOLDING AND DECISION:

LEGAL ANALYSIS:

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