La Mastro v. Commissioner
United States Tax Court
Petitioner husband formed a professional corporation which elected subchapter S status. During its first taxable year, encompassing 14 days, the corporation adopted a pension plan and made its initial contribution to the plan from funds borrowed from petitioner. The pension plan deduction produced a net operating loss for the corporation which petitioners deducted on their return.
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Petitioner husband formed a professional corporation which elected subchapter S status. During its first taxable year, encompassing 14 days, the corporation adopted a pension plan and made its initial contribution to the plan from funds borrowed from petitioner. The pension plan deduction produced a net operating loss for the corporation which petitioners deducted on their return. Held, the pension plan contribution constituted, in part, an unreasonable compensation allowance for services rendered by petitioner during the corporation's first (14-day) taxable year and petitioners' net…
1Opinion of the Court
Forrester, Judge:
Respondent has determined a deficiency in petitioners’ Federal income tax for the taxable year 1970 in the amount of $13,187.43.1 Concessions having been made, the sole remaining issue for our decision is whether petitioner husband’s pension plan contribution made by his wholly owned subchapter S corporation and deducted on its initial short taxable year return, pursuant to section 404(a),2 constituted a reasonable compensation allowance for services rendered to the extent of $19,207, and, therefore, limited his net operating loss pass-through for said taxable year to…
2Cases cited16 opinions
- Conley v. GibsonSupreme Court of the United States · 1957
- Jack E. Golsen and Sylvia H. Golsen v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1971
- Burnet v. ClarkSupreme Court of the United States · 1932
- Dalton v. BowersSupreme Court of the United States · 1932
- Lucas v. Ox Fibre Brush Co.Supreme Court of the United States · 1930
11 more not listed; retrieve them via the Exa API.
3Cited by18 opinions
- Foglesong v. CommissionerUnited States Tax Court · 1981
- Curtis v. CommissionerUnited States Tax Court · 1994
- Robert A. Young and Gertrude R. Young, and R. & G. Young Vineyards, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1981
- Foos v. Comm'rUnited States Tax Court · 1981
- Plastic Engineering & Mfg. Co. v. CommissionerUnited States Tax Court · 1982
13 more not listed; retrieve them via the Exa API.