William A. Brady Theatre Co. v. Commissioner

L. HAND, Circuit Judge.

The taxpayer is a New York corporation formed to produce plays. It had a small capital of ten thousand dollars, paid in cash by its four shareholders in equal shares. It got a five years’ term in a New York theatre, which was building when it was formed, for which it was to pay a yearly rental of $32,-500 and taxes of about $13,000; the value of this term does not appear. The shareholders agreed among themselves to keep the theatre going, and produced three plays during the year here in question, which ended on July 31, 1920. Of these the first and third were failures…