Holmes Enterprises, Inc. v. Commissioner
United States Tax Court
Petitioner is a corporation whose sole shareholder and president was arrested for transporting marijuana in petitioner's automobile. The automobile was seized and forfeited. Petitioner sought a deduction for the forfeiture as a business expense or a loss. Petitioner also sought deductions for the automobile's depreciation and operating expenses and for legal fees paid in an unsuccessful effort to prevent forfeiture.
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Petitioner is a corporation whose sole shareholder and president was arrested for transporting marijuana in petitioner's automobile. The automobile was seized and forfeited. Petitioner sought a deduction for the forfeiture as a business expense or a loss. Petitioner also sought deductions for the automobile's depreciation and operating expenses and for legal fees paid in an unsuccessful effort to prevent forfeiture. Held, forfeiture resulted in loss which was disallowed for public policy reasons. Also held, depreciation and operating expenses allowed for business use of automobile prior to…
1Opinion of the Court
OPINION
Tietjens, Judge:
Respondent determined a deficiency of $660 in petitioner’s Federal corporate income tax for the fiscal year ending August 31,1973. The issues are (1) whether petitioner is entitled to a business expense or loss deduction for an automobile seized by and forfeited to the United States because of use in an illegal activity; (2) whether petitioner is allowed to deduct legal fees incurred in contesting the forfeiture of its asset; and (3) whether petitioner is allowed a depreciation deduction for the forfeited automobile.
This case was fully stipulated pursuant to Rule 122,…
2Cases cited13 opinions
- New Colonial Ice Co. v. HelveringSupreme Court of the United States · 1934
- Commissioner v. TellierSupreme Court of the United States · 1966
- United States v. Hilton Hotels Corp.Supreme Court of the United States · 1970
- Fuller v. CommissionerUnited States Tax Court · 1953
- Fuller v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1954
8 more not listed; retrieve them via the Exa API.
3Cited by20 opinions
- Schad v. CommissionerUnited States Tax Court · 1986
- Stephens v. CommissionerUnited States Tax Court · 1989
- King v. United StatesDistrict Court, E.D. Washington · 1996
- Von Hafften v. CommissionerUnited States Tax Court · 1981
- Pring v. CommissionerUnited States Tax Court · 1989
15 more not listed; retrieve them via the Exa API.