Kerrigan Iron Works, Inc. v. Commissioner
United States Tax Court
The amounts petitioner is entitled to deduct as ordinary and necessary business expenses in the taxable years 1941, 1942, and 1943 are determined with respect to the following: (1) compensation paid to its president, Philip Kerrigan, Jr.; (2) rental of trucks; (3) rental of Northside Plant and equipment; and (4) compensation paid to Regina Kerrigan.
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The amounts petitioner is entitled to deduct as ordinary and necessary business expenses in the taxable years 1941, 1942, and 1943 are determined with respect to the following: (1) compensation paid to its president, Philip Kerrigan, Jr.; (2) rental of trucks; (3) rental of Northside Plant and equipment; and (4) compensation paid to Regina Kerrigan. The deduction of the amount paid in 1943 to McCarver in connection with petitioner's labor difficulties is disallowed for failure of proof.
1Opinion of the Court
OPINION.
Leech, Judge:
Our first question relates to the reasonableness of the salary paid by petitioner to its president, Philip Kerrigan, Jr., in the taxable years 1941,1942, and 1943. In each of those years petitioner paid Kerrigan the sum of $25,000, which amount it claimed as a deduction. In determining the deficiency the respondent disallowed $15,000 in 1941, $12,500 in 1942 and $10,000 in 1943.
What constitutes a reasonable allowance for salary expense is a question of fact under the circumstances of each particular case. Gem Jewelry Co. v. Commissioner, 165 F. 2d 991, certiorari denied…
2Cases cited6 opinions
- Sartor v. Arkansas Natural Gas Corp.Supreme Court of the United States · 1944
- Fitzgerald & Mallory Construction Co. v. FitzgeraldSupreme Court of the United States · 1890
- Gem Jewelry Co. v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1948
- R. H. Oswald Co., Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1950
- Church v. HarnitCourt of Appeals for the Sixth Circuit · 1929
1 more not listed; retrieve them via the Exa API.
3Cited by13 opinions
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- Barton-Gillet Co. v. CommissionerUnited States Tax Court · 1970
- Lando Products, Inc. v. CommissionerUnited States Tax Court · 1958
- American Allsafe Co. v. CommissionerUnited States Tax Court · 1954
- Bedford Sportswear, Inc. v. CommissionerUnited States Tax Court · 1954
8 more not listed; retrieve them via the Exa API.