T.J. ENTERPRISES v. COMMISSIONER OF INTERNAL REVENUE
United States Tax Court
J owned the majority of the outstanding shares of stock in P. P is franchisee in several H & R Block franchise agreements. The three franchises that yield the majority of P's business require royalty payments from P equal to 5 percent of gross receipts. The 5-percent royalty rate was contingent upon the continued majority ownership of P by J or certain other persons or entities related to J's deceased husband.
Read the full summary
J owned the majority of the outstanding shares of stock in P. P is franchisee in several H & R Block franchise agreements. The three franchises that yield the majority of P's business require royalty payments from P equal to 5 percent of gross receipts. The 5-percent royalty rate was contingent upon the continued majority ownership of P by J or certain other persons or entities related to J's deceased husband. Transfer of a majority interest in P to anyone else was considered an "event of increase", which would raise the royalty rate to 10 percent. J wished to sell her stock in P. However,…
1Opinion of the Court
OPINION
Ruwe, Judge:
Respondent determined deficiencies in petitioner’s Federal income taxes and additions to tax as follows:
Additions to tax
TYE Deficiency Sec. 6661(a) Sec. 6653(a)(1) Sec. 6653(a)(2) Sec. 6661
4/30/86 $36,800.36 N/A $1,840.02 50% of the interest due on $36,800.36 $9,200.09
Additions to tax
TYE Deficiency Sec. 6651(a) Sec. 6653(a)(1)(A) Sec. 6653(a)(1)(B) Sec. 6661
4/30/87 $34,499.46 $1,724.78 $4,907.63 50% of the interest due on $55,775.62 $13,943.91
4/30/88 24,099.75 N/A 1,445.39 50% of the interest due on $28,907.75 7,226.94
The issues for decision are: (1) Whether certain amounts…
2Cases cited25 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Deputy, Administratrix v. Du PontSupreme Court of the United States · 1940
- Indopco, Inc. v. CommissionerSupreme Court of the United States · 1992
- Kornhauser v. United StatesSupreme Court of the United States · 1928
- Commissioner v. Lincoln Savings & Loan Ass'nSupreme Court of the United States · 1971
20 more not listed; retrieve them via the Exa API.
3Cited by9 opinions
- Metrocorp, Inc. v. CommissionerUnited States Tax Court · 2001
- Benson v. Comm'rUnited States Tax Court · 2004
- Key Carpets v. Comm'rUnited States Tax Court · 2016
- Convergent Technologies v. CommissionerUnited States Tax Court · 1995
- Coastal Heart Med. Group, Inc. v. Comm'rUnited States Tax Court · 2015
4 more not listed; retrieve them via the Exa API.