Olinger Mortuary Ass'n v. Commissioner
United States Board of Tax Appeals
1. Payments made to a dissatisfied minority stockholder to secure his acquiescence in a transaction regarded by the manager of the corporation as necessary for the good of the corporation, are not ordinary and necessary business expenses within the meaning of section 234(a)(1), Revenue Act of 1924. 2. Payment by petitioner of a sum of money to secure the cancellation and abrogation of a contract whereby the holder thereof is to receive 15 per cent of the net profits of…
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1. Payments made to a dissatisfied minority stockholder to secure his acquiescence in a transaction regarded by the manager of the corporation as necessary for the good of the corporation, are not ordinary and necessary business expenses within the meaning of section 234(a)(1), Revenue Act of 1924. 2. Payment by petitioner of a sum of money to secure the cancellation and abrogation of a contract whereby the holder thereof is to receive 15 per cent of the net profits of another corporation is which petitioner owns all the capital stock, is a capital transaction and does not represent ordinary…
1Opinion of the Court
*1285OPINION.
Black:
Both petitioners allege that respondent erred in overstating net income, due to the disallowance of commission expense in the amount of $33,047.59. The facts developed at the hearing show that the above amount claimed by petitioners as a deduction on their consolidated income-tax return, plus certain minor adjustments not in dispute, make up a total of $35,750 and consists of *1286$8,250 credited to Frank W. Farmer by the Imperial Investment Company on its books, $15,000 which the Imperial Investment Company paid Ben Grimes in 1924, and $12,500 which was paid to the Collbran-Bostwick…
2Cited by6 opinions
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- Baltimore Steam Packet Co. v. United StatesUnited States Court of Claims · 1960
- Boulevard Frocks, Inc. v. CommissionerUnited States Tax Court · 1943
- Olinger Mortuary Ass'n v. CommissionerUnited States Board of Tax Appeals · 1931
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