Commercial Solvents Corp. v. Commissioner
United States Tax Court
1. Held, certain income received by petitioner during all the years here involved from a Japanese corporation (Kyowa) under an agreement dated August 6, 1951, was taxable to petitioner as ordinary income rather than as long-term capital gain. 2. In 1955 petitioner, on the accrual basis, entered into an agreement with a Canadian corporation (Northwest) to manage Northwest's business for an annual fee. The fee was to commence when commercial production of Northwest began.
Read the full summary
1. Held, certain income received by petitioner during all the years here involved from a Japanese corporation (Kyowa) under an agreement dated August 6, 1951, was taxable to petitioner as ordinary income rather than as long-term capital gain. 2. In 1955 petitioner, on the accrual basis, entered into an agreement with a Canadian corporation (Northwest) to manage Northwest's business for an annual fee. The fee was to commence when commercial production of Northwest began. The latter occurred on December 1, 1956. On December 31, 1956, petitioner had a fixed and unconditional right to receive its…
1Opinion of the Court
Arundell, Judge:
In these consolidated proceedings the respondent determined deficiencies in income tax for the calendar years 1951 and 1954 through 1957 in amounts as follows:
[[Image here]]
Two issues are presented: (1) Whether during all the years here involved petitioner received capital gains or ordinary income as the result of a contract entered into with Kyowa Fermentation Industry Co., Ltd., on August 6, 1951; and (2) whether petitioner realized management fees subject to tax in the amount of $50,833.83 in 1956 and $616,666.67 in 1957 from Northwest Nitro-Chemicals, Ltd.
The parties filed…
2Cases cited16 opinions
- United States v. AndersonSupreme Court of the United States · 1926
- Waterman v. MacKenzieSupreme Court of the United States · 1891
- Spring City Foundry Co. v. CommissionerSupreme Court of the United States · 1934
- Continental Tie & Lumber Co. v. United StatesSupreme Court of the United States · 1932
- United States v. Safety Car Heating & Lighting Co.Supreme Court of the United States · 1936
11 more not listed; retrieve them via the Exa API.
3Cited by28 opinions
- C. M. Gooch Lumber Sales Co. v. CommissionerUnited States Tax Court · 1968
- PPG Indus., Inc. v. CommissionerUnited States Tax Court · 1970
- Taylor-Winfield Corp. v. Comm'rUnited States Tax Court · 1971
- Hooker Chemicals & Plastics Corp. v. United StatesUnited States Court of Claims · 1979
- Commercial Solvents Corporation v. The United StatesUnited States Court of Claims · 1970
23 more not listed; retrieve them via the Exa API.