Board of Trade v. Commissioner
United States Tax Court
Petitioner (P) is a taxable membership corporation that operates a futures exchange. When a membership on the exchange is transferred, the transferee must pay P a transfer fee, which, under P's bylaws, is to be used to "purchase, retire or redeem the indebtedness encumbering the Board of Trade Building", which houses P's trading floor and substantial office space leased to third-party tenants.
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Petitioner (P) is a taxable membership corporation that operates a futures exchange. When a membership on the exchange is transferred, the transferee must pay P a transfer fee, which, under P's bylaws, is to be used to "purchase, retire or redeem the indebtedness encumbering the Board of Trade Building", which houses P's trading floor and substantial office space leased to third-party tenants. Held, the transfer fees are nontaxable contributions to capital, rather than taxable payments for services, because the transferees pay the fees with an investment motive, as evidenced by (1) the…
1Opinion of the Court
THE BOARD OF TRADE OF THE CITY OF CHICAGO AND SUBSIDIARIES, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Board of Trade v. Commissioner
Docket No. 8202-93.
United States Tax Court
106 T.C. 369; 1996 U.S. Tax Ct. LEXIS 22; 106 T.C. No. 21;
May 29, 1996, Filed
Decision will be entered for Petitioner.
Petitioner (P) is a taxable membership corporation that operates a futures exchange. When a membership on the exchange is transferred, the transferee must pay P a transfer fee, which, under P's bylaws, is to be used to "purchase, retire or redeem the indebtedness encumbering the Board of…
2Cases cited31 opinions
- Freuler v. HelveringSupreme Court of the United States · 1934
- General Utilities & Operating Co. v. HelveringSupreme Court of the United States · 1935
- City of New York v. SaperSupreme Court of the United States · 1949
- Recklitis v. CommissionerUnited States Tax Court · 1988
- Stark v. CommissionerUnited States Tax Court · 1986
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