Schnallinger v. Commissioner
United States Tax Court
Restaurant corporation A advanced to newly formed restaurant corporation B a total of $119,746 in 1976 in order to obtain expanded kitchen space and engage in other cost sharing. Said advances and accrued interest were consistently treated as loans on the books of both corporations. Due to unforeseen financial difficulties, the advances were not repaid.
Read the full summary
Restaurant corporation A advanced to newly formed restaurant corporation B a total of $119,746 in 1976 in order to obtain expanded kitchen space and engage in other cost sharing. Said advances and accrued interest were consistently treated as loans on the books of both corporations. Due to unforeseen financial difficulties, the advances were not repaid. Held, the advances constituted a bona fide loan to corporation B and not a constructive dividend to petitioner-husband, the sole shareholder of both corporations.
1Opinion of the Court
MAXIMILLIAN SCHNALLINGER AND DOROTHY SCHNALLINGER, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Schnallinger v. Commissioner
Docket No. 9522-84.
United States Tax Court
T.C. Memo 1987-9; 1987 Tax Ct. Memo LEXIS 9; 52 T.C.M. (CCH) 1311; T.C.M. (RIA) 87009;
January 6, 1987.
Restaurant corporation A advanced to newly formed restaurant corporation B a total of $119,746 in 1976 in order to obtain expanded kitchen space and engage in other cost sharing. Said advances and accrued interest were consistently treated as loans on the books of both corporations. Due to unforeseen financial…
2Cases cited14 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Gregory v. HelveringSupreme Court of the United States · 1935
- Litton Business Systems, Inc. v. CommissionerUnited States Tax Court · 1973
- Charles A. Sammons, Individually, and Estate of Rosine S. Sammons, Deceased, Charles A. Sammons, Independent v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1973
- Yelencsics v. CommissionerUnited States Tax Court · 1980
9 more not listed; retrieve them via the Exa API.
3Cited by1 opinion
- Dynamo Holdings Limited Partnership, Dynamo, GP, Inc., Tax Matters Partner v. CommissionerUnited States Tax Court · 2018