Heatbath Corp. v. Commissioner
United States Tax Court
1. Deduction -- Expense -- Compensation. -- Reasonable allowances determined for salaries or other compensation for personal services rendered to a corporation by its officers. 2. Deduction -- Expense -- Royalties. -- A corporation is entitled to deduct reasonable amounts representing fair compensation paid or accrued to two of its controlling stockholders for the use of their invention, in spite of their having granted the corporation a royalty-free license, where the…
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1. Deduction -- Expense -- Compensation. -- Reasonable allowances determined for salaries or other compensation for personal services rendered to a corporation by its officers. 2. Deduction -- Expense -- Royalties. -- A corporation is entitled to deduct reasonable amounts representing fair compensation paid or accrued to two of its controlling stockholders for the use of their invention, in spite of their having granted the corporation a royalty-free license, where the parties contemplated and intended to agree upon such compensation after a trial period. 3. Deduction -- Unpaid Expense --…
1Opinion of the Court
OPINION.
Murdock, Judge-.
It was incumbent upon the petitioner to show that the total salaries paid and claimed as deductions, or at least some amounts larger than those allowed, represent reasonable compensation for the services rendered by the officers. Careful consideration has been given to all of the evidence that appears in the record but it does not justify a finding that reasonable compensation for any of the officers was in excess of the amount allowed by the Commissioner. There is evidence of the services performed by the four persons, of the earnings and profits, and of the salaries…
2Cases cited6 opinions
- De Forest Radio Telephone Co. v. United StatesSupreme Court of the United States · 1927
- P. Dougherty Co. v. CommissionerUnited States Tax Court · 1945
- Anthony P. Miller, Inc. v. CommissionerUnited States Tax Court · 1946
- Akron Welding & Spring Co. v. CommissionerUnited States Tax Court · 1948
- Home Guaranty Abstract Co. v. CommissionerUnited States Tax Court · 1947
1 more not listed; retrieve them via the Exa API.
3Cited by2 opinions
- Finn H. Magnus and Elsie A. Magnus v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 1958
- Heatbath Corp. v. CommissionerUnited States Tax Court · 1950