Jennings v. Commissioner
United States Tax Court
For 25 years prior to 1942 petitioner operated his own business of selling railway parts and supplies. He, his wife, and his adult son executed a written partnership agreement, to be effective January 1, 1942. Held, petitioner's adult son was a bona fide partner because he performed vital additional services during 1942 and 1943 and his share of partnership net income is not taxable to petitioner; held, further, that petitioner is not taxable on the share of partnership…
Read the full summary
For 25 years prior to 1942 petitioner operated his own business of selling railway parts and supplies. He, his wife, and his adult son executed a written partnership agreement, to be effective January 1, 1942. Held, petitioner's adult son was a bona fide partner because he performed vital additional services during 1942 and 1943 and his share of partnership net income is not taxable to petitioner; held, further, that petitioner is not taxable on the share of partnership profits allocated to his wife in proportion to their respective capital contributions after deducting the reasonable value…
1Opinion of the Court
OPINION.
ARUndell, Judge-.
Petitioner contends that the partnership, consisting of himself, his wife, and his son, is valid for income tax purposes because it meets the tests established in the now familiar cases of Commissioner v. Tower, 327 U. S. 280, and Lusthaus v. Commissioner, 327 U. S. 293. The Supreme Court stated in the Tower case that a family partnership is entitled to recognition tax-wise if each member “invests capital originating with her [or him] or substantially contributes to the control and management of the business, or otherwise performs vital additional services, or does…
2Cases cited3 opinions
- Commissioner v. TowerSupreme Court of the United States · 1946
- Lusthaus v. CommissionerSupreme Court of the United States · 1946
- Canfield v. CommissionerUnited States Tax Court · 1946
3Cited by1 opinion
- Jennings v. CommissionerUnited States Tax Court · 1948