Procacci v. Comm'r
United States Tax Court
Ps were partners of M, which purchased a golf course and leased it to C, a corporation controlled by M's partners. Due to the fact that C's operating expenses payable to unrelated third parties exhausted its funds, C paid no rent to M. Respondent allocated rent from C to M under sec. 482, I.R.C., and issued corresponding notices of deficiency to Ps.
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Ps were partners of M, which purchased a golf course and leased it to C, a corporation controlled by M's partners. Due to the fact that C's operating expenses payable to unrelated third parties exhausted its funds, C paid no rent to M. Respondent allocated rent from C to M under sec. 482, I.R.C., and issued corresponding notices of deficiency to Ps. Held, the amount of rent, if any, properly allocable to M under sec. 482 is essentially a factual issue, and there are no per se rules or bright-line tests for the determination. Held, further, an unrelated lessee dealing at arm's length would…
1Opinion of the Court
PARKER, Judge:
In these consolidated cases, respondent determined deficiencies in petitioners’ Federal income tax as follows:
Docket No. Petitioners Year Deficiency
5170-82 Joseph and Teresa 1976 $10,728.00 Procacci
5787-82 Michael and Frances 1976 24,224.00 Procacci
4538-84 Angelo Penza 1978 6,959.00 1979 9,310.16
Unless otherwise indicated, all section references are to the Internal Revenue Code of 1954 as amended and in effect for the taxable years in question, and all Rule references are to the Tax Court Rules of Practice and Procedure.
The above deficiencies arise out of adjustments made by…
2Cases cited15 opinions
- Helvering v. National Grocery Co.Supreme Court of the United States · 1938
- Freytag v. CommissionerUnited States Tax Court · 1987
- Parker v. CommissionerUnited States Tax Court · 1986
- Achiro v. CommissionerUnited States Tax Court · 1981
- Ach v. CommissionerUnited States Tax Court · 1964
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3Cited by7 opinions
- Altera Corp. v. Comm'rUnited States Tax Court · 2015
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- Automotive Inv. Dev. v. CommissionerUnited States Tax Court · 1993
- Jamar v. CommissionerUnited States Tax Court · 1991
- Procacci v. Comm'rUnited States Tax Court · 1990
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