Blue Flame Gas Co. v. Commissioner
United States Tax Court
1. Lessor and its sole shareholder entered into an agreement with lessee whereby the assets of the lessor and assets owned by the shareholder individually were to be leased to lessee for a 10-year period. As part of the same agreement, the lessee agreed to extend a loan to the shareholder of lessor in the amount of the aggregate rental payments due under said leases.
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1. Lessor and its sole shareholder entered into an agreement with lessee whereby the assets of the lessor and assets owned by the shareholder individually were to be leased to lessee for a 10-year period. As part of the same agreement, the lessee agreed to extend a loan to the shareholder of lessor in the amount of the aggregate rental payments due under said leases. Loan repayments coincided exactly in amount and time of payment with the rental payments due under the leases. Held, under the circumstances of this case the purported loan constituted the payment of advance rentals to the lessor…
1Opinion of the Court
OPINION
The first issue for decision is whether the purported loan to petitioner in fact represented advance rentals taxable to petitioner and Blue Flame and, if so, whether the receipt by petitioner of amounts attributable to Blue Flame resulted in a taxable dividend. Respondent has treated the purported loan as the prepayment of rentals due under the leases executed by Blue Flame and petitioner contemporaneously with the loan and pursuant to the same agreement.
It is too well established to require discussion, and petitioner does not contend otherwise, that the receipt of advance rentals…
2Cases cited12 opinions
- Moline Properties, Inc. v. CommissionerSupreme Court of the United States · 1943
- Commissioner v. P. G. Lake, Inc.Supreme Court of the United States · 1958
- Paymer v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1945
- Walburga Oesterreich v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1955
- Weigman v. CommissionerUnited States Tax Court · 1967
7 more not listed; retrieve them via the Exa API.
3Cited by7 opinions
- In Re BarryUnited States Bankruptcy Court, M.D. Tennessee · 1985
- Martin v. CommissionerUnited States Tax Court · 1999
- Barker v. CommissionerUnited States Tax Court · 1993
- Blue Flame Gas Co. v. CommissionerUnited States Tax Court · 1970
- Greenfield v. CommissionerUnited States Tax Court · 1982
2 more not listed; retrieve them via the Exa API.