- 455 -
transactions between an individual and a corporation in which
such individual owns, directly or indirectly, more than 50
percent in value of the outstanding stock. Other provisions of
the statute define "related persons", and other rules define what
constitutes direct and indirect ownership of corporate stock.
In Hickman v. Commissioner, T.C. Memo. 1972-208, this Court
stated that section 267(b)(2) and (c)(1) "contemplate valuing the
stock interest owned by or for an individual, whether outright or
in trust for his benefit, without detracting from the value of
the stock because it is indirectly owned rather than directly
owned. If the section is to apply equally to indirect and direct
ownership, this must be the case."
C. Abandonment Loss
To be entitled to an abandonment loss under section 165, a
taxpayer must show: (1) An intention on the part of the owner to
abandon the asset, and (2) an affirmative act of abandonment.
See Citron v. Commissioner, 97 T.C. 200, 208-209 (1991), and
cases cited therein. An affirmative act to abandon must be
ascertained from all the facts and circumstances, see United Cal.
Bank v. Commissioner, 41 T.C. 437, 451 (1964), affd. per curiam
340 F.2d 320 (9th Cir. 1965), and "the Tax Court [is] entitled to
look beyond the taxpayer's formal characterization", Laport v.
Commissioner, 671 F.2d 1028, 1032 (7th Cir. 1982), affg. T.C.
Memo. 1980-355. "The mere intention alone to abandon is not, nor
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