Schlude v. Commissioner
United States Tax Court
The Studio, a partnership operating Arthur Murray Dance Studio, entered into contracts with students whereby it agreed to furnish dancing lessons and the student agreed to pay therefor. The student would make a downpayment and pay the balance in installments, sometimes giving a note therefor. The Studio, an accrual basis partnership, returned as gross income the pro rata amount of the contract price based on the number of lessons taught during the year.
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The Studio, a partnership operating Arthur Murray Dance Studio, entered into contracts with students whereby it agreed to furnish dancing lessons and the student agreed to pay therefor. The student would make a downpayment and pay the balance in installments, sometimes giving a note therefor. The Studio, an accrual basis partnership, returned as gross income the pro rata amount of the contract price based on the number of lessons taught during the year. Usually, by the end of the year, the balance of the contract price or some portion thereof had been paid by the student. The Commissioner…
1Opinion of the Court
OPINION.
Black, Judge:
The petitioners are equal partners in the Studio, a partnership which owns and operates five Arthur Murray Dance Studios under franchise agreements with Arthur Murray, Inc. In dispute is the amount of the Studio’s gross income. Specifically, the dispute relates to the manner in which the receipts from contracts for dancing lessons are to be reported.
The problem may best be explained by the following illustration : On August 1, 1952, the Studio enters into a contract with a student whereby the Studio agrees to teach the student 24 1-hour dancing lessons and the student…
2Cases cited8 opinions
- Automobile Club of Mich. v. CommissionerSupreme Court of the United States · 1957
- Spring City Foundry Co. v. CommissionerSupreme Court of the United States · 1934
- Commissioner v. HansenSupreme Court of the United States · 1959
- Automobile Club of New York, Inc. v. CommissionerUnited States Tax Court · 1959
- Your Health Club, Inc. v. CommissionerUnited States Tax Court · 1944
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3Cited by15 opinions
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- Mark E. Schlude and Marzalie Schlude, Husband and Wife v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1960
- Streight Radio & Television, Inc. v. CommissionerUnited States Tax Court · 1959
- William O. McMahon, Inc. v. CommissionerUnited States Tax Court · 1965
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