Vaughan v. Commissioner
United States Board of Tax Appeals
1. From January 1 to March 18, 1929, inclusive, the petitioner, as sole proprietor, conducted a stock brokerage business under the name of Vaughan & Co. On March 19, 1929, the petitioner entered into a profit-sharing agreement with two former employees under which they were to receive 40 percent of the profits and the petitioner 60 percent. The petitioner furnished all the capital.
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1. From January 1 to March 18, 1929, inclusive, the petitioner, as sole proprietor, conducted a stock brokerage business under the name of Vaughan & Co. On March 19, 1929, the petitioner entered into a profit-sharing agreement with two former employees under which they were to receive 40 percent of the profits and the petitioner 60 percent. The petitioner furnished all the capital. The agreement provided that the two former employees should not contribute to the losses except out of the profits. Held, that the petitioner is entitled to deduct from his gross income of 1929 the total loss of…
1Opinion of the Court
*553OPINION.
Smith:
The first question for decision is whether the petitioner is entitled to deduct from his gross income the total loss of the partnership business from March 19, 1929, to the end of the year. In his return the petitioner deducted only 60 percent of such loss, which was the amount of the loss allocated to him on the partnership return filed. He now makes the contention that, inasmuch as the operations of the partnership to December 31, 1929, resulted in a loss, he is entitled to deduct the entire amount of the loss by reason of the provisions of the partnership contract that the…
2Cases cited1 opinion
- Rock Island, Arkansas & Louisiana Railroad v. United StatesSupreme Court of the United States · 1920
3Cited by5 opinions
- Savings Feature of Relief Dep't v. CommissionerUnited States Board of Tax Appeals · 1935
- Savings Feature of Relief Dep't v. CommissionerUnited States Board of Tax Appeals · 1935
- Siarto v. CommissionerUnited States Tax Court · 1947
- Tellier v. CommissionerUnited States Tax Court · 1963
- Vaughan v. CommissionerUnited States Board of Tax Appeals · 1934