Place v. Commissioner
United States Tax Court
Petitioner rented from his wife property used in the manufacturing business he operated as a sole proprietor for which he paid a fixed rental of $ 200 per month from 1938 to 1942. In 1942 petitioner decided on his own initiative to pay an increased rental and entered into an agreement with his wife to pay as rent a sum equal to 45 per cent of his net profits.
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Petitioner rented from his wife property used in the manufacturing business he operated as a sole proprietor for which he paid a fixed rental of $ 200 per month from 1938 to 1942. In 1942 petitioner decided on his own initiative to pay an increased rental and entered into an agreement with his wife to pay as rent a sum equal to 45 per cent of his net profits. Accordingly, for the year 1942 and for 5 months in 1943 he paid sums 10 to 30 times larger than the previously fixed rental. Held, respondent is sustained in his determination that all sums in excess of $ 2,400 for 1942 and $ 1,000 for…
1Opinion of the Court
OPINION.
Arundell, Judge:
The petitioner claimed a deduction of $24,938.34 in 1942 and $30,406.74 in 1943 as rentals paid his wife for the use of her property in a manufacturing concern owned and operated by him. The respondent has determined that these sums are excessive to the ■extent that they exceed $2,400 for 1942 and $1,000 for 1943, and that this excess was a gift.
The petitioner contends that section 23 of the Internal Revenue Code does not apply the limitation of reasonableness to deductions claimed for rents as it does in the case of wages and salaries and concludes that therefore the…
2Cases cited10 opinions
- Commissioner v. CulbertsonSupreme Court of the United States · 1949
- Beecher v. BushMichigan Supreme Court · 1881
- Limericks, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1948
- Limericks, Inc. v. CommissionerUnited States Tax Court · 1946
- Fletcher v. FletcherMichigan Supreme Court · 1919
5 more not listed; retrieve them via the Exa API.
3Cited by95 opinions
- Beck Chemical Equipment Corp. v. CommissionerUnited States Tax Court · 1957
- Levenson & Klein, Inc. v. CommissionerUnited States Tax Court · 1977
- Sparks Nugget, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1972
- American Metal Products Corp. v. CommissionerUnited States Tax Court · 1960
- Southern Ford Tractor Corp. v. CommissionerUnited States Tax Court · 1958
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