Putoma Corp. v. Commissioner
United States Tax Court
Individual petitioners Hunt and Purselley each owned 50 percent of the stock of petitioner corporations Putoma and Pro-Mac. Individual petitioners were also salaried employees of the two corporations. In 1970, Hunt and Purselley, cash basis taxpayers, canceled about $ 260,000 that petitioner corporations owed them for accrued but unpaid salaries and interest which the corporations had previously deducted.
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Individual petitioners Hunt and Purselley each owned 50 percent of the stock of petitioner corporations Putoma and Pro-Mac. Individual petitioners were also salaried employees of the two corporations. In 1970, Hunt and Purselley, cash basis taxpayers, canceled about $ 260,000 that petitioner corporations owed them for accrued but unpaid salaries and interest which the corporations had previously deducted. Held, petitioner corporations' obligation for accrued but unpaid compensation was conditional and not properly accruable during the years in question. Held, further, cancellation of the…
1Opinion of the Court
Wilbur, Judge:
Respondent has determined the following deficiencies in petitioners’ Federal income tax:
Deficiency Docket No. Petitioner(s) Taxable period
$7,808.88 7468-73 Putoma Corp., successor by merger of Pro-Mac Co._ FY 7/31/67
62,274.65 FY 7/31/68
38,233.57 FY 7/31/69
11.612.39 FY 7/31/71
4,094.02 7469-73 Lee Roy Purselley and Georgia Purselley_ 1969
17,387.01 7470-73 Putoma Corp._ FY 6/30/66
11.667.40 FY 6/30/67
166,075.24 FY 6/30/68
13,016.76 7/1-12/31/70
83,728.45 7471-73 1970 J. M. Hunt and Inez Hunt
92,580.12 7472-73 1970 Lee Roy Purselley_
Certain concessions having been made by the parties,…
2Cases cited62 opinions
- Commissioner v. DubersteinSupreme Court of the United States · 1960
- Eisner v. MacOmberSupreme Court of the United States · 1920
- Helvering v. HorstSupreme Court of the United States · 1940
- United States v. AndersonSupreme Court of the United States · 1926
- Dobson v. CommissionerSupreme Court of the United States · 1944
57 more not listed; retrieve them via the Exa API.
3Cited by78 opinions
- Southern Pacific Transp. Co. v. CommissionerUnited States Tax Court · 1980
- Herrick v. CommissionerUnited States Tax Court · 1985
- Putoma Corp., Successor by Merger of Pro-Mac Company, Petitioners- Cross-Appellants v. Commissioner of Internal Revenue, Cross-AppelleeCourt of Appeals for the Fifth Circuit · 1979
- Bennett Paper Corp. & Subsidiaries v. CommissionerUnited States Tax Court · 1982
- Stoody v. CommissionerUnited States Tax Court · 1976
73 more not listed; retrieve them via the Exa API.