Interior Securities Corp. v. Commissioner

OPINION.

Black, Judge:

Respondent has determined that the entire rental income reported by the partnership is taxable to the four corporate petitioners under the provisions of section 61 of the 1954 Code on the grounds that the corporations retained ownership, dominion, and control over the rental properties, which properties were the source of the income.2

Respondent primarily contends that either the partnership is not bona fide and is a sham created to divert corporate income or that the lease arrangements between the partnership and the corporate petitioners were nothing more than a tax…