- 5 -
and used vehicles purchased by customers from ECI and other car
dealerships owned by Mr. Cordes. In 1997, CFC merged into ECI,
with ECI surviving as the successor corporation.
During the taxable years at issue, members of the Cordes
family held legal title to all the shares of stock in CFC and
ECI. On January 1, 1994, Jean Ann Richard and John Cordes each
held legal title to 33.3 percent of the shares of stock in CFC,
and June J. Cordes (Mrs. Cordes) held legal title to the
remaining 33.4 percent of the shares of stock in CFC. On January
14, 1994, Mrs. Cordes transferred her legal title to Eddy Ben
Cordes. Cordes v. Commissioner, T.C. Memo. 2002-124. No further
transfers of stock in CFC took place in the years at issue. At
all times during the years at issue, Eddy Ben Cordes held legal
title to 100 percent of the shares of stock in ECI.
Mr. Cordes exercised complete control over CFC and ECI (the
corporations) during the taxable years at issue. Mr. Cordes
controlled all of the corporations’ operations and made all
decisions pertaining to the timing, amount, and character of the
distributions at issue herein. All corporate decisions that
would typically be made by shareholders--including who would hold
legal title to the shares of stock in the corporations, and for
how long--were made by Mr. Cordes. The record owners had no
knowledge of the corporations’ day-to-day operations, did not
authorize or disapprove of any of the distributions at issue,
and, in many cases, were not aware of those distributions.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011