Stout v. Commissioner
United States Tax Court
1. A partnership, pursuant to the partnership agreement, paid "salaries" to petitioner Stout and some of the other partners, the amount paid as salaries being a charge to the capital account of each partner proportionately to the extent the payments exceeded net income of the partnership. The partners had contributed relatively small amounts to the partnership and the salaries were paid principally from a construction loan obtained by the partnership.
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1. A partnership, pursuant to the partnership agreement, paid "salaries" to petitioner Stout and some of the other partners, the amount paid as salaries being a charge to the capital account of each partner proportionately to the extent the payments exceeded net income of the partnership. The partners had contributed relatively small amounts to the partnership and the salaries were paid principally from a construction loan obtained by the partnership. Held, the amount received by petitioner Stout is taxable to him except to the extent it represented a return of his capital investment. Held,…
1Opinion of the Court
Atkins, Judge:
The respondent determined deficiencies in income tax and additions to tax against the petitioners as follows:
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The principal issue presented for decision in Docket No. 61555 is whether an amount paid to petitioner Joe W. Stout as “salary” pursuant to the terms of a partnership agreement, is taxable to him in full. Other issues relate to the deductibility by the partnership of various taxes paid in the course of construction of two apartment projects; whether the petitioners are entitled to a deduction in 1952 of a net operating loss carryback from 1953; and whether…
2Cases cited12 opinions
- North American Oil Consolidated v. BurnetSupreme Court of the United States · 1932
- Healy v. CommissionerSupreme Court of the United States · 1953
- Textile Mills Securities Corp. v. CommissionerSupreme Court of the United States · 1941
- Leonard v. MaxwellSupreme Court of North Carolina · 1939
- Prudential Insurance Co. of America v. PowellSupreme Court of North Carolina · 1940
7 more not listed; retrieve them via the Exa API.
3Cited by23 opinions
- Cagle v. CommissionerUnited States Tax Court · 1974
- Shainberg v. CommissionerUnited States Tax Court · 1959
- McGowan v. CommissionerUnited States Tax Court · 1976
- Bryan v. CommissionerUnited States Tax Court · 1959
- Arrigoni v. CommissionerUnited States Tax Court · 1980
18 more not listed; retrieve them via the Exa API.