Allen v. Commissioner
United States Tax Court
P claimed a $ 25,000 charitable "contribution" to N, an organization exempt from tax under sec. 501(c)(3), I.R.C. 1954. Ten percent of the contribution originated with P, and 90 percent was borrowed from F, a for-profit entity related to N. The principal of the unsecured loan was due in 20 years. Simple annual interest, at 3 percent, was due quarterly. Three-percent interest was a below-market rate.
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P claimed a $ 25,000 charitable "contribution" to N, an organization exempt from tax under sec. 501(c)(3), I.R.C. 1954. Ten percent of the contribution originated with P, and 90 percent was borrowed from F, a for-profit entity related to N. The principal of the unsecured loan was due in 20 years. Simple annual interest, at 3 percent, was due quarterly. Three-percent interest was a below-market rate. Unbeknownst to P, the money he "borrowed" was flowing through a "money circle." Funds originating with N had been loaned to I (a related nonprofit entity), which loaned them to F, which in turn…
1Opinion of the Court
Kenneth Allen and Barbara L. Allen, Petitioners v. Commissioner of Internal Revenue, Respondent
Allen v. Commissioner
Docket No. 22877-84
United States Tax Court
92 T.C. 1; 1989 U.S. Tax Ct. LEXIS 1; 92 T.C. No. 1;
January 5, 1989; As amended January 5, 1989 January 5, 1989, Filed
Decision will be entered under Rule 155.
P claimed a $ 25,000 charitable "contribution" to N, an organization exempt from tax under sec. 501(c)(3), I.R.C. 1954. Ten percent of the contribution originated with P, and 90 percent was borrowed from F, a for-profit entity related to N. The principal of the unsecured loan was…
2Cases cited14 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- New Colonial Ice Co. v. HelveringSupreme Court of the United States · 1934
- Gregory v. HelveringSupreme Court of the United States · 1935
- Deputy, Administratrix v. Du PontSupreme Court of the United States · 1940
- Neely v. CommissionerUnited States Tax Court · 1985
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