Faucette Co. v. Commissioner
United States Tax Court
1. The reasonable compensation for each of petitioner's three executives for services actually rendered by each in the respective taxable years 1945 and 1946 determined. 2. Petitioner, on the accrual basis, is entitled to deduct the amount of $ 2,500 in 1945 and $ 1,200 in 1946, the payment of which was authorized by its directors and in those respective years and paid before the 15th day of the third month following the close of each of such years, representing…
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1. The reasonable compensation for each of petitioner's three executives for services actually rendered by each in the respective taxable years 1945 and 1946 determined. 2. Petitioner, on the accrual basis, is entitled to deduct the amount of $ 2,500 in 1945 and $ 1,200 in 1946, the payment of which was authorized by its directors and in those respective years and paid before the 15th day of the third month following the close of each of such years, representing contributions to educational institutions, under section 23 (q), I. R. C., as amended.
1Opinion of the Court
OPINION.
Leech, Judge:
The first issue presents the question of the reasonableness of the salaries paid by petitioner to its three executives in the taxable years 1945 and 1946. Petitioner has the burden of establishing the fact of reasonableness.
Petitioner is the successor of a business originally founded in 1900 for the purpose of engaging in the wholesale grocery business. It was originally organized by J. D. Faucette, father of J. E. Faucette and L. M. Faucette, president and vice-president, respectively, of petitioner since the death of their father in August 1942. P. Buchanan, secretary…
2Cases cited1 opinion
- International Railway Co. v. DavidsonSupreme Court of the United States · 1922
3Cited by22 opinions
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- Alabama Pipe Co. v. CommissionerUnited States Tax Court · 1954
- Lozano, Inc. v. CommissionerUnited States Tax Court · 1977
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