John B. White, Inc. v. Commissioner
United States Tax Court
T corporation operated an authorized Ford dealership in Philadelphia, Pa. In 1965, Ford, which held none of T's stock, paid T $ 59,290 to induce T to move its dealership to another location within Philadelphia. Ford offered the payment in order to increase the sales of its products and enhance its image by having T's dealership located in a more desirable neighborhood and in a more attractive and better equipped building than its current location.
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T corporation operated an authorized Ford dealership in Philadelphia, Pa. In 1965, Ford, which held none of T's stock, paid T $ 59,290 to induce T to move its dealership to another location within Philadelphia. Ford offered the payment in order to increase the sales of its products and enhance its image by having T's dealership located in a more desirable neighborhood and in a more attractive and better equipped building than its current location. Held, the payment is includable in T's income and is not excludable as a contribution to capital.
1Opinion of the Court
OPINION
Naum:, Judge:
The Commissioner determined a deficiency of $27,819.91 in the taxpayer’s income tax for the calendar year 1965 and a 10-percent addition to the tax under section 6651(a), I.R.C. 1954, in the amount of $2,781.99. The issues for decision are whether an incentive payment made by Ford Motor Co. is income to the taxpayer under section 61,1.R.C. 1954, and if so, whether it is excludable from the taxpayer’s gross income as a contribution to capital under section 118. There is no dispute about the section 6651(a) addition to tax; the propriety of that addition depends entirely…
2Cases cited17 opinions
- Helvering v. CliffordSupreme Court of the United States · 1940
- Commissioner v. Glenshaw Glass Co.Supreme Court of the United States · 1955
- Douglas v. WillcutsSupreme Court of the United States · 1935
- Commissioner v. LoBueSupreme Court of the United States · 1956
- Irwin v. GavitSupreme Court of the United States · 1925
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3Cited by7 opinions
- G.M. Trading Corp. v. CommissionerUnited States Tax Court · 1994
- John B. White, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 1972
- May Dep't Stores Co. v. CommissionerUnited States Tax Court · 1974
- Brooks v. CommissionerUnited States Tax Court · 1987
- Brooks v. CommissionerUnited States Tax Court · 1987
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