Belaire Management Corp. v. Commissioner
United States Tax Court
Sec. 102, I. R. C. -- Accumulations Beyond Business Needs. -- An advertising and promotion agent for a Canadian whiskey bottler reimbursed monthly by the client for all expenditures made for the client, accumulated the earnings of its first year of operation beyond the reasonable needs of its business and was subject to tax under section 102 of the Internal Revenue Code.
1Opinion of the Court
OPINION.
Murdock, Judge:
Section 102(a) provides for the imposition of a surtax upon a corporation if it was availed of during the taxable year for the purpose of preventing the imposition of the surtax upon its shareholders through the medium of permitting its earnings or profits to accumulate instead of being divided. Section 102 (c) provides:
Evidence Determinative of Purpose. — The fact that the 'earnings or profits of a corporation are permitted to accumulate beyond the reasonable needs of the business shall be determinative of the purpose to avoid surtax upon shareholders unless the…
2Cases cited3 opinions
- Jacob Sincoff, Inc. v. CommissionerUnited States Tax Court · 1953
- Gibbs & Cox, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1945
- Jacob Sincoff, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1953
3Cited by4 opinions
- Pelton Steel Casting Co. v. CommissionerUnited States Tax Court · 1957
- Ted Bates & Co. v. CommissionerUnited States Tax Court · 1965
- Belaire Management Corp. v. CommissionerUnited States Tax Court · 1954
- Pelton Steel Casting Co. v. CommissionerUnited States Tax Court · 1957