California Vegetable Concentrates, Inc. v. Commissioner
United States Tax Court
1. Held, on the facts, that amounts of deductions for compensation paid officers pursuant to contingent contract entered into in prior years were reasonable compensation for personal services actually rendered, and were properly deducted under section 23 (a) (1) (A) of the Internal Revenue Code. 2. The petitioner filed with its return a claim for relief under section 722 and under section 710 (a) (5) reduced the amount payable by 33 per cent of the amount of the claim.
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1. Held, on the facts, that amounts of deductions for compensation paid officers pursuant to contingent contract entered into in prior years were reasonable compensation for personal services actually rendered, and were properly deducted under section 23 (a) (1) (A) of the Internal Revenue Code. 2. The petitioner filed with its return a claim for relief under section 722 and under section 710 (a) (5) reduced the amount payable by 33 per cent of the amount of the claim. Held, that the deficiency herein does not include as tax imposed the 33 per cent of the claim under section 722. 3. Credit…
1Opinion of the Court
OPINION.
DisNex, Judge:
The disagreement of the parties on the salary question is whether the amounts paid to Sims and Pardieck constitute reasonable compensation for services actually rendered within the meaning of the applicable statute, section 23 (a) (1) (A) of the code. The issue is essentially a question of fact, controlled by the peculiar circumstances of record. No controversy is joined as to payment, or time of payment.
Each of the salaries in question consisted of a basic amount annually, $10,000 in the case of Sims and $7,800 in the case of Pardieck, plus a portion of the net profits,…
2Cases cited1 opinion
- Uni-Term Stevedoring Co. v. CommissionerUnited States Tax Court · 1944
3Cited by56 opinions
- Stein v. CommissionerUnited States Tax Court · 1956
- Home Interiors & Gifts, Inc. v. CommissionerUnited States Tax Court · 1980
- American Foundry v. CommissionerUnited States Tax Court · 1972
- Joseph Weidenhoff, Inc. v. CommissionerUnited States Tax Court · 1959
- Pittsburgh & Weirton Bus Co. v. CommissionerUnited States Tax Court · 1954
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