Marble & Shattuck Chair Co. v. Commissioner
United States Board of Tax Appeals
1. Petitioner made a payment of $40,000 to its four principal stockholders as compensation for services in addition to the compensation regularly provided for each of the fiscal years ended June 30, 1920, and June 30, 1921. Thirty-seven thousand five hundred dollars of this amount was distributed in accordance with an agreement by the principal officers and stockholders prior to payment.
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1. Petitioner made a payment of $40,000 to its four principal stockholders as compensation for services in addition to the compensation regularly provided for each of the fiscal years ended June 30, 1920, and June 30, 1921. Thirty-seven thousand five hundred dollars of this amount was distributed in accordance with an agreement by the principal officers and stockholders prior to payment. Held, that $2,560 of such amount constituted a legal deduction from gross income in income-tax returns for the years in question as reasonable compensation for personal services actually rendered. 2.…
1Opinion of the Court
*662OPINION.
Smith :
The principal question presented by these proceedings is whether the petitioner is entitled to deduct from gross income in its income-tax returns for the fiscal years ended June 30, 1920, and June 30, 1921, $40,000 distributed at the close of each of those years to its stockholders. The distribution was equal to $5.33^ cents per share of common stock; F. D. Hills, A. B. Hunn, and H. G. Hunn, owning 3,544 shares of stock, received their pro rata shares of the distribution, but T. W. Foote, owning 3,942 shares, received slightly more than his pro rata share — he receiving the pro…
2Cited by6 opinions
- Apollo Steel Co. v. CommissionerUnited States Tax Court · 1945
- Marble & Shattuck Chair Co. v. CommissionerUnited States Board of Tax Appeals · 1928
- Seas Shipping Co. v. CommissionerUnited States Tax Court · 1965
- Standard Asbestos Mfg. & Insulating Co. v. CommissionerUnited States Tax Court · 1958
- Vogue Silk Hosiery Co. v. CommissionerUnited States Board of Tax Appeals · 1932
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