Mathews v. Commissioner
United States Tax Court
1. Petitioners, husband and wife, created several 10-year trusts for the benefit of their minor children to which they transferred property used in the husband's trade or business, which he in turn leased back from the trusts.
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1. Petitioners, husband and wife, created several 10-year trusts for the benefit of their minor children to which they transferred property used in the husband's trade or business, which he in turn leased back from the trusts. Held, on the facts, the rentals paid constitute ordinary and necessary business expenses, and petitioners' reversionary interest was not a disqualifying "equity" in the property within the meaning of sec. 162(a)(3) and did not preclude petitioners from deducting the reasonable rent paid to the trusts for the use and possession of the term-of-years held by the trusts. 2.…
1Opinion of the Court
Hall, Judge:*
Respondent determined deficiencies in petitioners’ Federal income taxes as follows:
Year Deficiency
1964 _-_$2, 974. 54
1965 _ 2, 774. 21
1966 _ 2, 545.07
Total_ 8, 293. 82
The issues for decision are the following:(1) During the years 1964, 1965, and 1966, are petitioners entitled to rental deductions with respect to payments made to four family trusts?(2) During the years 1964, 1965, and 1966, are petitioners entitled to business deductions in an amount in excess of that allowed by respondent with respect to business entertainment expenses, business gifts, and club dues claimed by…
2Cases cited33 opinions
- Jack E. Golsen and Sylvia H. Golsen v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1971
- Walburga Oesterreich v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1955
- Furman v. CommissionerUnited States Tax Court · 1966
- Irvine K. Furman and Lorena K. Furman v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1967
- Mills v. CommissionerUnited States Tax Court · 1948
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3Cited by47 opinions
- Grodt & McKay Realty, Inc. v. CommissionerUnited States Tax Court · 1981
- Luman v. CommissionerUnited States Tax Court · 1982
- Markosian v. CommissionerUnited States Tax Court · 1980
- BJR Corp. v. CommissionerUnited States Tax Court · 1976
- C. James Mathews v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1975
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