Todd v. Commissioner
United States Tax Court
Held, taxpayer's annual entries of credits in his business ledger in the names of members of his family, usually in multiples of $ 3,000 each, did not constitute gifts no matter how emphatically the taxpayer testified as to his donative intent and his understanding that he was liable to pay the credit balances on demand.
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Held, taxpayer's annual entries of credits in his business ledger in the names of members of his family, usually in multiples of $ 3,000 each, did not constitute gifts no matter how emphatically the taxpayer testified as to his donative intent and his understanding that he was liable to pay the credit balances on demand. The taxpayer's deduction of interest at 10 percent on such credit balances was correctly disallowed as no debtor-creditor relationship was created by such book entries.
1Opinion of the Court
MulroNby, Judge:
Respondent determined deficiencies in petitioner’s income tax for the years and in the amounts as follows:
Docket No.— Year Deficiency
4586-65_ 1961 $7, 176.21
516-67_ 1962 6,282.31
516-67_ 1963 7,514. 22
2386-67_ 1964 9,694.54
All issues have been settled with the exception of certain interest deductions which petitioners took in each of the years involved for amounts paid purportedly as interest on book credits in petitioners’ books standing in the names of members of petitioners’ family.
BINDINGS OF PACT
Some of the facts have been stipulated and they are found accordingly.
The…
2Cases cited7 opinions
- Mercil v. CommissionerUnited States Tax Court · 1955
- Christensen v. CommissionerUnited States Tax Court · 1963
- Woodward v. United StatesCourt of Appeals for the Eighth Circuit · 1953
- Estate of Hite v. CommissionerUnited States Tax Court · 1968
- William Herbert Brown and Mary F. Brown v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1957
2 more not listed; retrieve them via the Exa API.
3Cited by7 opinions
- Linder v. CommissionerUnited States Tax Court · 1977
- Estate of Whitt v. CommissionerUnited States Tax Court · 1983
- Gordon B. And Elizabeth H. Todd v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1970
- Kraft v. CommissionerUnited States Tax Court · 1969
- Linder v. CommissionerUnited States Tax Court · 1977
2 more not listed; retrieve them via the Exa API.