Reynard Corp. v. Commissioner
United States Board of Tax Appeals
Where a building was erected by a corporation on its own property and at its own cost for the purpose of supplying a residence to its president and sole stockholder, held, that the reasonable value of the use of the residence was taxable income to the president as additional compensation, but was not income to the corporation as rental.
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Where a building was erected by a corporation on its own property and at its own cost for the purpose of supplying a residence to its president and sole stockholder, held, that the reasonable value of the use of the residence was taxable income to the president as additional compensation, but was not income to the corporation as rental. There being no evidence as to whether such additional compensation was reasonable, it is held that the corporation is not entitled to deduct such amount from its gross income.
1Opinion of the Court
*453OPINION.
Maequette :
At the hearing counsel for petitioners conceded that the premises occupied by Fox had a fair rental value of $3,000 a year, but no more, and asserted that this amount should be included in Fox’s gross income as additional compensation and not as a dividend. We have found the value to be as claimed. In reaching this conclusion we have disregarded the fact that Fox spends about five months of each year in Florida, for the reason that the premises were his to occupy whenever he chose. On the other hand, the evidence shows that the residence was not built for rental purposes,…
2Cases cited1 opinion
- Botany Worsted Mills v. United StatesSupreme Court of the United States · 1929
3Cited by24 opinions
- Challenge Mfg. Co. v. CommissionerUnited States Tax Court · 1962
- Dean v. CommissionerUnited States Tax Court · 1961
- Melvin v. CommissionerUnited States Tax Court · 1987
- Greenspun v. CommissionerUnited States Tax Court · 1979
- Taylor v. CommissionerUnited States Tax Court · 1965
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