Cato v. Commissioner
United States Tax Court
P, a foster parent, provided a home for disabled foster children and received payments for providing foster care. The funds were received from a placement agency described in sec. 501(c)(3), I.R.C., and exempt from tax under sec. 501(a). A portion of the funds for such payments was provided by the Federal Government. Held, for 1986, 1987, and 1988, sec. 131 excludes from P's gross income the foster care receipts.
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P, a foster parent, provided a home for disabled foster children and received payments for providing foster care. The funds were received from a placement agency described in sec. 501(c)(3), I.R.C., and exempt from tax under sec. 501(a). A portion of the funds for such payments was provided by the Federal Government. Held, for 1986, 1987, and 1988, sec. 131 excludes from P's gross income the foster care receipts. Held, further, for 1985, secs. 1401 and 1402 tax the excess of foster care receipts over foster care expenses as self-employment income because P's activity was a trade or business.
1Opinion of the Court
Bobby L. Cato and Pamela R. Cato, Petitioners v. Commissioner of Internal Revenue, Respondent
Cato v. Commissioner
Docket No. 9438-90
United States Tax Court
99 T.C. 633; 1992 U.S. Tax Ct. LEXIS 89; 99 T.C. No. 33;
December 22, 1992, Filed
Decision will be entered under Rule 155.
P, a foster parent, provided a home for disabled foster children and received payments for providing foster care. The funds were received from a placement agency described in sec. 501(c)(3), I.R.C., and exempt from tax under sec. 501(a). A portion of the funds for such payments was provided by the Federal Government. Held,…
2Cases cited13 opinions
- United States v. American Trucking AssociationsSupreme Court of the United States · 1940
- Commissioner v. GroetzingerSupreme Court of the United States · 1987
- Takao Ozawa v. United StatesSupreme Court of the United States · 1922
- National Labor Relations Board v. Lion Oil Co.Supreme Court of the United States · 1957
- Commissioner v. EngleSupreme Court of the United States · 1984
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