Soabar Co. v. Commissioner
United States Tax Court
1. Deductions -- Officers' Salaries. -- The amount paid to two officers held deductible under section 23 (a) (1) (A) as reasonable compensation for services rendered. 2. Abnormal Income -- Section 721 (a) (2) (C) -- Allocation of Net Abnormal Income to Other Years. -- Whatever net abnormal income of the section 721 (a) (2) (C) class the petitioner had in the tax years was not allocable to other years where it appears that the increase in this class of income in the tax years…
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1. Deductions -- Officers' Salaries. -- The amount paid to two officers held deductible under section 23 (a) (1) (A) as reasonable compensation for services rendered. 2. Abnormal Income -- Section 721 (a) (2) (C) -- Allocation of Net Abnormal Income to Other Years. -- Whatever net abnormal income of the section 721 (a) (2) (C) class the petitioner had in the tax years was not allocable to other years where it appears that the increase in this class of income in the tax years over the amount received in the base years was due to improved business conditions which resulted in a greater demand…
1Opinion of the Court
OPINION.
MuRdock, Judge:
Section 23 (a) (1) (A) of the Internal Revenue Code allows a deduction of “a reasonable allowance for salaries or other compensation for personal services actually rendered.” The Commissioner has disallowed part of the compensation of two of the petitioner’s officers for the years 1939 to 1941, inclusive, upon the ground that the amounts paid were “excessive.” The respondent’s main contention in his briefs seems to be that the arrangement for compensation of these two men was a plan devised and resorted to in connection with the dividends to divide the profits of the…
2Cases cited1 opinion
- W. B. Knight Machinery Co. v. CommissionerUnited States Tax Court · 1946
3Cited by46 opinions
- James D. Kennedy, Jr. And Dorothy H. Kennedy, and Cherokee Warehouses, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1982
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- Morrisdale Coal Mining Co. v. CommissionerUnited States Tax Court · 1949
- Keystone Brass Works v. CommissionerUnited States Tax Court · 1949
- Pantasote Leather Co. v. CommissionerUnited States Tax Court · 1949
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