Johnston v. Commissioner
United States Tax Court
A husband transferred to his wife an interest in a partnership business which was being operated by him and his father. For this interest she gave him her demand note which it was contemplated would be paid out of her shares of the profits in a new partnership.
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A husband transferred to his wife an interest in a partnership business which was being operated by him and his father. For this interest she gave him her demand note which it was contemplated would be paid out of her shares of the profits in a new partnership. Immediately thereafter the new partnership, operating the same kind of business as the old, was, by written agreement, entered into by the husband and wife and other parties, and the wife's interest in the old partnership was carried forward into the new, the assets of the old partnership having been transferred to the new. On the…
1Opinion of the Court
OPINION.
Tyson, Judge-.
Without explanation as to the basis for his determination, respondent “held” that petitioner was subject to income tax on that portion of the net income of J. D. Johnston, Jr. Co. “which was allocated to” his “wife, Mrs. Camilla Tatum Johnston.”
On brief, respondent contends that petitioner's wife was not a bona fide partner in the firm for the purposes of the Federal income tax, and that the income therefrom attributed to her was taxable to petitioner. His basis for such contention is the assertion that the sole purpose of the wife’s “purported entry into the business”…
2Cases cited2 opinions
- Burnet v. LeiningerSupreme Court of the United States · 1932
- Marcrum v. SmithSupreme Court of Alabama · 1921
3Cited by27 opinions
- Montgomery v. ThomasCourt of Appeals for the Fifth Circuit · 1944
- Tower v. COMMISSIONER OF INTERNAL REVENUECourt of Appeals for the Sixth Circuit · 1945
- Scherer v. CommissionerUnited States Tax Court · 1944
- Smith v. CommissionerUnited States Tax Court · 1944
- Appel v. SmithCourt of Appeals for the Seventh Circuit · 1947
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