Royal Arrow Co. v. Commissioner
United States Tax Court
1. Held: Payments made by petitioner Royal Arrow Co., Inc. to Hugh P. and Rosa Emerson in the taxable years 1966 and 1967 pursuant to an employment contract entered into contemporaneously with the sale of its stock to petitioners Edward R. and Virginia Mims are deductible as reasonable compensation or as an ordinary and necessary business expense under section 162, I.R.C. of 1954. 2. Held: The payments made by Royal Arrow Co., Inc. to Hugh P. and Rosa Emerson in the taxable…
Read the full summary
1. Held: Payments made by petitioner Royal Arrow Co., Inc. to Hugh P. and Rosa Emerson in the taxable years 1966 and 1967 pursuant to an employment contract entered into contemporaneously with the sale of its stock to petitioners Edward R. and Virginia Mims are deductible as reasonable compensation or as an ordinary and necessary business expense under section 162, I.R.C. of 1954. 2. Held: The payments made by Royal Arrow Co., Inc. to Hugh P. and Rosa Emerson in the taxable year 1967 pursuant to said employment contract were not a part of the purchase price of the stock and were not taxable…
1Opinion of the Court
Royal Arrow Co., Inc. v. Commissioner. Edward R. and Virginia Mims v. Commissioner.
Royal Arrow Co. v. Commissioner
Docket Nos. 3560-70, 3561-70.
United States Tax Court
T.C. Memo 1972-58; 1972 Tax Ct. Memo LEXIS 196; 31 T.C.M. (CCH) 241; T.C.M. (RIA) 72058;
March 1, 1972, Filed
1. Held: Payments made by petitioner Royal Arrow Co., Inc. to Hugh P. and Rosa Emerson in the taxable years 1966 and 1967 pursuant to an employment contract entered into contemporaneously with the sale of its stock to petitioners Edward R. and Virginia Mims are deductible as reasonable compensation or as an ordinary and…
2Cases cited3 opinions
- J. Strickland & Company v. United StatesCourt of Appeals for the Sixth Circuit · 1965
- Nassau Suffolk Lumber & Supply Corp. v. CommissionerUnited States Tax Court · 1969
- Nicholas Co. v. CommissionerUnited States Tax Court · 1962