Frelbro Corp. v. Commissioner
United States Tax Court
Petitioner, an accrual basis taxpayer, prior to July of the calendar year in issue (1952), owned all the outstanding stock of Brown-Longyear Motors. It also derived income from rental of real estate and from other investments. Transactions between the two corporations (including declared but unpaid dividends) had been recorded in a system of intercompany accounts on the books of both corporations.
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Petitioner, an accrual basis taxpayer, prior to July of the calendar year in issue (1952), owned all the outstanding stock of Brown-Longyear Motors. It also derived income from rental of real estate and from other investments. Transactions between the two corporations (including declared but unpaid dividends) had been recorded in a system of intercompany accounts on the books of both corporations. The items in these accounts were discharged when and as Brown-Longyear felt it was in a cash position which enabled it to do so, there being no policy to clear the account periodically. In July…
1Opinion of the Court
Fokrester, Judge:
Respondent has determined a deficiency in income tax for the calendar year 1952 in the amount of $1,473.04 and a personal holding company surtax, under section 500,1 of $24,462.07. By amended answer he seeks to increase both amounts.
The issues presented for our determination are:(1) What was the amount of the payment to petitioner in 1952 from Brown-Longyear Motors and what portion of it was a dividend to petitioner in that year ?(2) Whether Brown-Longyear had a credit balance in its earnings and profits account at the end of 1951 so as to constitute the above distribution a…
2Cases cited36 opinions
- Woolford Realty Co. v. RoseSupreme Court of the United States · 1932
- Libson Shops, Inc., v. Koehler, District Director of Internal RevenueSupreme Court of the United States · 1957
- Marr v. United StatesSupreme Court of the United States · 1925
- Commissioner of Internal Revenue v. SansomeCourt of Appeals for the Second Circuit · 1932
- Commissioner v. MunterSupreme Court of the United States · 1947
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3Cited by22 opinions
- Allied Fidelity Corp. v. CommissionerUnited States Tax Court · 1976
- Clarksdale Rubber Co. v. CommissionerUnited States Tax Court · 1965
- Dynamics Corporation of America (Formerly Claude Neon, Inc.) v. The United StatesUnited States Court of Claims · 1968
- The Denver & Rio Grande Western Railroad Company, a Corporation v. The United StatesUnited States Court of Claims · 1963
- J. A. Tobin Constr. Co. v. CommissionerUnited States Tax Court · 1985
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