Vertex Inv. Co. v. Commissioner
United States Board of Tax Appeals
Petitioner corporation was organized in 1911 for the purpose of holding investments. Its stock was held by 5 brothers and sisters. The oldest brother was president, treasurer and general manager, and the full conduct of its affairs was left to him by the other stockholders. All moneys belonging to petitioner were kept in his personal bank account, upon which he drew annual dividend checks to the order of the other stockholders.
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Petitioner corporation was organized in 1911 for the purpose of holding investments. Its stock was held by 5 brothers and sisters. The oldest brother was president, treasurer and general manager, and the full conduct of its affairs was left to him by the other stockholders. All moneys belonging to petitioner were kept in his personal bank account, upon which he drew annual dividend checks to the order of the other stockholders. He died in 1935. From 1911 to the time of his death he used moneys belonging to petitioner for his own benefit, but entered these sums regularly upon the books of…
1Opinion of the Court
*256OPINION.
Kern:
As stated above, the main issue is whether 80 percent of peti-
tioner’s gross income in 1937 was personal holding company income as that term is defined in section 353 (a) of the Revenue Act of 1937. The facts disclose that over a period of years the deceased ex-president and ex-treasurer of petitioner had commingled the funds of petitioner with his own by depositing them together in his individual bank account and had used for his own purposes the sum of $140,124.01 from petitioner’s funds without any corporate authority and without the knowledge of petitioner’s other…
2Cases cited2 opinions
- Bechtel v. ChaseCalifornia Supreme Court · 1909
- Miller v. Youmans-Burke Oil & Gas Co.Michigan Supreme Court · 1937
3Cited by8 opinions
- District of Columbia v. National Bank of WashingtonDistrict of Columbia Court of Appeals · 1981
- 320 East 47th Street Corp. v. CommissionerCourt of Appeals for the Second Circuit · 1957
- Hunt v. CommissionerUnited States Tax Court · 1968
- Kovacs v. CommissionerUnited States Tax Court · 1993
- Kovacs v. CommissionerUnited States Tax Court · 1993
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