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denied) the Commissioner's Motion for Entry of Decision where the
Commissioner's proposed decision document included language by
which the Court would purportedly decide the individual
shareholders' bases in the S corporation during the year in
issue. Focusing on the language contained in section 301.6245-
1T(c), Temporary Proced. & Admin. Regs., which states that the
critical element classifying an item as a subchapter S item is
whether the S corporation was required to make a determination
with respect to a matter, the Court noted that the Commissioner
had not argued that an individual shareholder's basis in an S
corporation is an item that is required to be taken into account
for the taxable year of an S corporation. See Dial, Inc. v.
Commissioner, supra at 4. The Court also noted that there are
situations where the amount of an individual shareholder's basis
simply cannot be determined from items that the corporation is
required to take into account. See id. Finally, the Court
rejected the Commissioner's argument that the Court could decide
the amount of the shareholders' bases "in a qualified manner that
acknowledges that other factors might change the basis figures".
Id. at 4-6.
In University Heights v. Commissioner, 97 T.C. 278 (1991),
the Court followed its holding in Dial, Inc. v. Commissioner,
supra, that the amount of an individual shareholder's basis in an
S corporation is not a subchapter S item.
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