Blue Flame Gas Co. v. Commissioner

OPINION

The first issue for decision is whether the purported loan to petitioner in fact represented advance rentals taxable to petitioner and Blue Flame and, if so, whether the receipt by petitioner of amounts attributable to Blue Flame resulted in a taxable dividend. Respondent has treated the purported loan as the prepayment of rentals due under the leases executed by Blue Flame and petitioner contemporaneously with the loan and pursuant to the same agreement.

It is too well established to require discussion, and petitioner does not contend otherwise, that the receipt of advance rentals…