Brooklyn Radio Service Corp. v. Commissioner
United States Board of Tax Appeals
A corporation agreed to pay its president a salary measured by a percentage of its net sales for the taxable year, with the understanding that the amount would not be paid as long as the corporation was indebted to finance companies on account of its own insufficiency of working capital or to any banks, and in no event until after the taxable year, and with the further understanding that the amount due would be subordinated by him to the indebtedness of all other creditors…
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A corporation agreed to pay its president a salary measured by a percentage of its net sales for the taxable year, with the understanding that the amount would not be paid as long as the corporation was indebted to finance companies on account of its own insufficiency of working capital or to any banks, and in no event until after the taxable year, and with the further understanding that the amount due would be subordinated by him to the indebtedness of all other creditors of the corporation. Held, while the time of payment was uncertain, the obligation to pay the salary (there having been…
1Opinion of the Court
OPINION.
Muedock:
The petitioner in this proceeding contends that a deficiency of $3,664.55 for the calendar year 1929 was improperly determined. The Commissioner admits that he erred in disallowing a deduction of $3,300 representing accounting fees. The only issue submitted to the Board is whether or not the petitioner incurred a liability in 1929 to pay its president as part of his salary 2 percent of *270its net sales so that the amount was an ordinary and necessary expense incurred in that year. No question of the reasonableness of compensation is raised. The material facts were stipulated.
The…
2Cases cited8 opinions
- United States v. AndersonSupreme Court of the United States · 1926
- Lucas v. American Code Co.Supreme Court of the United States · 1930
- American National Co. v. United StatesSupreme Court of the United States · 1927
- W. M. Ritter Lumber Co. v. CommissionerUnited States Board of Tax Appeals · 1934
- Haskell & Barker Car Co. v. CommissionerUnited States Board of Tax Appeals · 1928
3 more not listed; retrieve them via the Exa API.
3Cited by2 opinions
- United Control Corp. v. CommissionerUnited States Tax Court · 1962
- Brooklyn Radio Service Corp. v. CommissionerUnited States Board of Tax Appeals · 1934