William A. Corrao Electric Co. v. Commissioner
United States Board of Tax Appeals
1. During 1920 and 1921 petitioner was engaged in the business of electrical construction as an independent contractor, and considerable amounts of capital were necessarily used in fulfilling such contracts. It also carried on purely supervisory work, under separate contracts, in which capital was not a material income-producing factor. More than 50 per centum of its gross income was derived from the line of business first mentioned.
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1. During 1920 and 1921 petitioner was engaged in the business of electrical construction as an independent contractor, and considerable amounts of capital were necessarily used in fulfilling such contracts. It also carried on purely supervisory work, under separate contracts, in which capital was not a material income-producing factor. More than 50 per centum of its gross income was derived from the line of business first mentioned. Held, petitioner was not entitled to classification as a personal service corporation. 2. Petitioner's capital stock was owned by three persons, only one of…
1Opinion of the Court
*1374OPINION.
Marquette:
A personal service corporation is defined by section 200 of the Revenue Act of 1918 as one:
* * * whose income is to be ascribed primarily to the activities of the principal owners or stockholders who are themselves regularly engaged in the active conduct of the affairs of the corporation and in which capital (whether invested or borrowed) is not a material income-producing factor; but does not include * * * any corporation 50 per centum or more of whose gross income consists * * * of gains, profits or income derived from trading as a principal * * *.
In order to become…
2Cited by11 opinions
- Sperapani v. CommissionerUnited States Tax Court · 1964
- Rousku v. CommissionerUnited States Tax Court · 1971
- Miller v. CommissionerUnited States Tax Court · 1969
- Gaudern v. CommissionerUnited States Tax Court · 1981
- Smith v. CommissionerUnited States Tax Court · 1983
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