Smith--Lustig Paper Box Mfg. Co. v. Commissioner
United States Tax Court
Petitioner, on an accrual basis, while under contract, as to borrowing funds with the Reconstruction Finance Corporation, to limit compensation to each of two officers to $ 4,000 per year, by resolution set compensation at $ 6,000 to each, but payment was in large part made after the taxable years, and after the loan to the Reconstruction Finance Corporation was paid.
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Petitioner, on an accrual basis, while under contract, as to borrowing funds with the Reconstruction Finance Corporation, to limit compensation to each of two officers to $ 4,000 per year, by resolution set compensation at $ 6,000 to each, but payment was in large part made after the taxable years, and after the loan to the Reconstruction Finance Corporation was paid. Held, that the liability for compensation above $ 4,000 per year for each officer was contingent and no accruable liability, and that denial of deduction of the amount unpaid in the taxable years was not error. Deduction…
1Opinion of the Court
OPINION.
Disney, Judge:
In 1938 the Reconstruction Finance Corporation, in making a loan to the petitioner, by contract limited the petitioner’s right to pay compensation to its president, S. A. Smith, and vice president, M. J. Lustig, to $4,000 for each; for a closing agreement was subject to the terms of a resolution passed by the Reconstruction Finance Corporation, so limiting compensation to be paid. Another term of the resolution entering into the contract was a guaranty by Smith and Lustig. The Commissioner determined the deficiency by allowing in each of the taxable years deduction for…
2Cases cited2 opinions
- Reiner v. North American Newspaper AllianceNew York Court of Appeals · 1932
- Roberts v. CrissCourt of Appeals for the Second Circuit · 1920
3Cited by8 opinions
- United Control Corp. v. CommissionerUnited States Tax Court · 1962
- Connolly Tool & Engineering Co. v. CommissionerUnited States Tax Court · 1964
- Hooker Electrochemical Co. v. CommissionerUnited States Tax Court · 1947
- Buffalo Shook Co. v. CommissionerUnited States Tax Court · 1951
- Hooker Electrochemical Co. v. CommissionerUnited States Tax Court · 1947
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