Donald A. Peck Judith W. Peck v. Commissioner of Internal Revenue

In Peck I, the tax court held that the transfer served a legitimate business purpose, and it concluded that the Commissioner could not “disallow” the deduction because section 482 authorized him only to “distribute, apportion, or allocate” certain items. Peck v. Commissioner, 43 T.C.M. (CCH) 291, 295 (1982).

The court went on to hold in favor of the Commissioner on the contention that the rent deduction should be reduced by the amount of those additional payments for expenses directly attributable to the land transferred to the corporation (as distinguished from payments attributable to the…