William C. De Mille Prods. v. Commissioner
United States Board of Tax Appeals
1. Though the corporation was not formed, or, during its first three years, availed of for the purpose of avoiding surtax on its stockholder, where the facts reveal that in the year 1926 petitioner corporation, which had a surplus of $178,000, borrowed $100,000 and loaned its principal stockholder $195,000, meanwhile distributing only $12,000 in dividends, which loan was not reduced during the subsequent six years although during such time petitioner paid its principal…
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1. Though the corporation was not formed, or, during its first three years, availed of for the purpose of avoiding surtax on its stockholder, where the facts reveal that in the year 1926 petitioner corporation, which had a surplus of $178,000, borrowed $100,000 and loaned its principal stockholder $195,000, meanwhile distributing only $12,000 in dividends, which loan was not reduced during the subsequent six years although during such time petitioner paid its principal stockholder an aggregate of $200,000 as salary, it is held that during the taxable years 1926, 1927, and 1928 the corporation…
1Opinion of the Court
*829OPINION.
Van Fossan:
In this case it is necessary to peer into the mind of the taxpayer to determine its intent. In this process the declaration of the owning stockholder is important, but it is neither conclusive in its character nor exclusive of other evidence. In our search for corroboration or negation of the declarations, we may properly consider all other pertinent facts, the attendant circumstances and the normal inferences to be drawn therefrom. In short, though intent is a state of mind, it is nevertheless a fact to be proved and found as are other facts.
Section 220 of the Revenue Act…
2Cited by20 opinions
- Durovic v. CommissionerUnited States Tax Court · 1970
- World Pub. Co. v. United StatesDistrict Court, N.D. Oklahoma · 1947
- Charleston Lumber Co. v. United StatesDistrict Court, S.D. West Virginia · 1937
- Snyder v. CommissionerUnited States Tax Court · 1969
- Cummings v. CommissionerUnited States Tax Court · 1968
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