Gersten v. Commissioner
United States Tax Court
1. Four corporations in which certain of the petitioners were stockholders were engaged in the business of subdividing tracts of land into lots and constructing and selling houses thereon. To procure the waterlines necessary to supply water for the houses so built and sold, the corporations, under contracts with the water company, paid the cost of the extension of the water company's lines into the various properties.
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1. Four corporations in which certain of the petitioners were stockholders were engaged in the business of subdividing tracts of land into lots and constructing and selling houses thereon. To procure the waterlines necessary to supply water for the houses so built and sold, the corporations, under contracts with the water company, paid the cost of the extension of the water company's lines into the various properties. For a period of 10 years from the date of completion of the waterlines, the water company agreed to make payments to the corporations based on a percentage of the gross revenue…
1Opinion of the Court
OPINION.
TURNER, Judge:
The first issue raised in the proceedings is whether the payments which the 4 corporations, Richard, Whittier, Rex, and Lawrence, made to San Gabriel were properly included by such corporations in computing the cost of the houses which they constructed and sold. The respondent determined that the amounts paid to San Gabriel were not properly includible by the corporations in computing their cost of goods sold because all such payments were repayable. Petitioners, on the other hand, argue that the liability of each of the corporations to pay for the installation of the…
2Cases cited27 opinions
- Burnet v. LoganSupreme Court of the United States · 1931
- Putnam v. CommissionerSupreme Court of the United States · 1956
- United States v. Beacon Brass Co.Supreme Court of the United States · 1952
- Commissioner of Internal Revenue v. CarterCourt of Appeals for the Second Circuit · 1948
- Colony, Inc. v. CommissionerUnited States Tax Court · 1956
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3Cited by2 opinions
- Commissioner of Internal Revenue v. George W. Offutt, Iii, and Jane P. Offutt, and Pimmit Development CorporationCourt of Appeals for the Fourth Circuit · 1964
- Gersten v. CommissionerUnited States Tax Court · 1957