Cummings v. Commissioner
United States Tax Court
P was a director and shareholder of MGM, and in 1962, he made a payment to MGM of $ 53,870.81 when the SEC indicated that P might be liable to MGM for such amount as an insider's profit within the meaning of sec. 16(b) of the Securities Exchange Act of 1934. Held, under the particular circumstances of this case, the payment is an ordinary and necessary business expense of P; Nathan Cummings, 60 T.C. 91 (1973), reaffirmed.
1Opinion of the Court
OPINION
Simpson, Judge:
An opinion was filed in this case on April 23,1973, 60 T.C. 91. In such opinion, we held that in the circumstances of the case, the petitioner was entitled, by virtue of section 162 of the Internal Revenue Code of 1954,1 to deduct as an ordinary and necessary business expense a payment made to MGM. Such payment was made after an indication that the petitioner might be liable for an insider’s profit in violation of section 16 (b) of the Securities Exchange Act of 1934, but the Court found that the payment was made to protect the business reputation of the petitioner and…
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- Smith v. CommissionerUnited States Tax Court · 1976
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