Feingold v. Commissioner
United States Tax Court
The petitioners owned all the stock of a small business corporation which was engaged in the business of renting furnished bungalows to vacationers. In 1961 and 1962, almost all of its receipts consisted of payments for the use of the bungalows. Held, these receipts constituted "rents" within the meaning of sec. 1372(e)(5), I.R.C. 1954, and sec. 1.1372-4(b)(5)(iv), Income Tax Regs. thus causing a termination of the election of the corporation under sec. 1372(a), I.R.C. 1954.
1Opinion of the Court
OPINION
The issue in this case is whether net operating losses sustained by Germac during the years 1961 and 1962 are deductible from the income of its shareholders, the petitioners, under section 1374. Under that section, the shareholders of an electing small business corporation are allowed to deduct the losses of the corporation. Since Germac made a timely election under section 1342 to be taxed as a small business corporation under subchapter S, the only question is whether that election terminated under section 1372(e) (5) because 100 percent of the corporation’s receipts in 1961 and more…
2Cases cited2 opinions
- United States v. Felt & Tarrant Manufacturing Co.Supreme Court of the United States · 1931
- Ingram v. United StatesSupreme Court of the United States · 1959
3Cited by17 opinions
- Buhler Mortg. Co. v. CommissionerUnited States Tax Court · 1969
- Bramlette Bldg. Corp. v. CommissionerUnited States Tax Court · 1969
- Lansing Broadcasting Co. v. CommissionerUnited States Tax Court · 1969
- Thompson v. CommissionerUnited States Tax Court · 1980
- City Markets, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1970
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