J. Gordon Turnbull, Inc. v. Commissioner
United States Tax Court
Where petitioner accumulated earnings substantially in excess of its working capital requirements; where it was not necessary for petitioner to retain its earnings to meet any contingent liability it might have had on certain tort suits because there was virtually no possibility of liability with respect thereto; and where petitioner made large investments of funds in property unrelated to its architectural and engineering services business.
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Where petitioner accumulated earnings substantially in excess of its working capital requirements; where it was not necessary for petitioner to retain its earnings to meet any contingent liability it might have had on certain tort suits because there was virtually no possibility of liability with respect thereto; and where petitioner made large investments of funds in property unrelated to its architectural and engineering services business. Held, that under section 102, I.R.C. 1939, petitioner was availed of during the taxable years involved for the purpose of preventing imposition of surtax…
1Opinion of the Court
OPINION
Issue 1
Section 102(a) of the Internal Eevenue Code of 1939 provides that if a corporation is availed of for the purpose of preventing the imposition of surtax on its shareholders by permitting earnings or profits to accumulate instead of being distributed, then the corporation is subject to a surtax on the amount of undistributed section 102 net income. Section 102(c) provides that the accumulation of earnings or profits beyond the reasonable needs of the business shall be determinative of the purpose to avoid surtax upon shareholders unless the corporation proves to the contrary by…
2Cases cited23 opinions
- Helvering v. National Grocery Co.Supreme Court of the United States · 1938
- Pelton Steel Casting Co. v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1958
- American Metal Products Corporation v. Commissioner of Internal Revenue, Adler Metal Products Corporation v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1961
- Barrow Manufacturing Company, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1961
- American Metal Products Corp. v. CommissionerUnited States Tax Court · 1960
18 more not listed; retrieve them via the Exa API.
3Cited by38 opinions
- Bremerton Sun Publishing Co. v. CommissionerUnited States Tax Court · 1965
- Estate of Goodall v. CommissionerCourt of Appeals for the Eighth Circuit · 1968
- Rutter v. CommissionerUnited States Tax Court · 1983
- Chatham Corp. v. CommissionerUnited States Tax Court · 1967
- J.H. Rutter Rex Mfg. Company, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1988
33 more not listed; retrieve them via the Exa API.