Quartz Laboratories, Inc. v. Secretary of War
United States Tax Court
Certain individuals organized a corporation to engage in the manufacture of crystals for radio and radar sets under renegotiable war contracts. During the taxable year the corporation paid them $ 139,098.82 as compensation for personal services.
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Certain individuals organized a corporation to engage in the manufacture of crystals for radio and radar sets under renegotiable war contracts. During the taxable year the corporation paid them $ 139,098.82 as compensation for personal services. The respondent determined that the compensation paid them was unreasonable, and that the corporation had excessive profits for the taxable year of $ 60,000. Held, the compensation paid such individuals was unreasonable in view of the services rendered by them and respondent correctly determined the corporation's excessive profits for the taxable year…
1Opinion of the Court
OPINION.
Arnold, Judge:
The fundamental question here is whether Quartz had excessive profits in the taxable year. The answer depends upon whether all or only a part of the $139,098.82 paid by Quartz for executive, managerial, engineering, and expediting services should be considered as an element of cost in carrying out its war contracts. The parties are agreed that the contracts are renegotiable and that the amount of Quartz’s net renegotiable profits for 1943, before compensation for the above services, is $175,067.61.
Petitioner contends that the compensation paid its officers, and John H.…
2Cited by3 opinions
- Waltham Screw Co. v. Renegotiation BoardUnited States Tax Court · 1958
- Quartz Laboratories, Inc. v. Secretary of WarUnited States Tax Court · 1948
- Waltham Screw Co. v. Renegotiation BoardUnited States Tax Court · 1958