Drew v. Commissioner
United States Tax Court
1. The taxpayer and his wife in 1918 began a dry cleaning business with small capital, to which each had contributed separate funds; in 1919 they began a clothing business financed by a joint loan and savings. The wife contributed vital services and shared in business management.
Read the full summary
1. The taxpayer and his wife in 1918 began a dry cleaning business with small capital, to which each had contributed separate funds; in 1919 they began a clothing business financed by a joint loan and savings. The wife contributed vital services and shared in business management. In 1943 the taxpayer conveyed to her a half interest in the clothing business and its assets as tenant in common with him by an instrument which provided that they thereafter share equally in profits and losses. Before and after 1943 all funds were kept in bank accounts of the business, against which each could draw.…
1Opinion of the Court
OPINION.
Johnson, Judge:
Under the view that no partnership between petitioner and his wife should be recognized for tax purposes, respondent determined petitioner taxable on all the profits from Drew’s Manstore in 1944 and 1945, but reduced such profits by $5,547.82 and $10,627.88, respectively, described as deductions “for salary to your wife and interest on her investment in the business.” The amounts of these deductions equal 30 per cent of profits computed without them. From this method of computation it is obvious that the deductions do hot represent determinations of reasonable…
2Cases cited5 opinions
- Commissioner v. TowerSupreme Court of the United States · 1946
- Berkshire Oil Co. v. CommissionerUnited States Tax Court · 1947
- Goodman v. CommissionerUnited States Tax Court · 1946
- Olinger v. CommissionerUnited States Tax Court · 1948
- Marks v. CommissionerUnited States Tax Court · 1946
3Cited by13 opinions
- Schnitzer v. CommissionerUnited States Tax Court · 1949
- Estate of Strangi v. CommissionerUnited States Tax Court · 2000
- Lilly v. CommissionerUnited States Tax Court · 1950
- Ware Knitters, Inc. v. United StatesUnited States Court of Claims · 1958
- Friedlander Corp. v. CommissionerUnited States Tax Court · 1953
8 more not listed; retrieve them via the Exa API.