Dahlem Foundation, Inc. v. Commissioner
United States Tax Court
Petitioner was engaged during the years at issue in the business of acquiring undeveloped real estate, arranging for the construction of improvements thereon, leasing the improvements thereon, and attending to the maintenance and repair of certain portions of its rental properties.
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Petitioner was engaged during the years at issue in the business of acquiring undeveloped real estate, arranging for the construction of improvements thereon, leasing the improvements thereon, and attending to the maintenance and repair of certain portions of its rental properties. Held, petitioner was not a "mere holding or investment company" for purposes of the accumulated earnings tax provisions; held, further, the compensation petitioner paid to its officer-shareholders was reasonable, and consequently, was fully deductible under the provisions of sec. 162(a)(1).
1Opinion of the Court
OPINION
Issue 1. A ccwmulated Eamings Tax
This case presents for our determination inter alia the narrow issue of whether during the period involved herein petitioner was a “mere holding or investment company” for purposes of the accumulated earnings tax provisions, which are embodied in sections 531 through 537 of the Code. Section 532(a) provides that the accumulated earnings tax imposed by section 531 shall be applicable (with certain exceptions not relevant hereto) to any corporation “formed or availed of for the purpose of avoiding the income tax with respect to its shareholders * * * by…
2Cases cited11 opinions
- Botany Worsted Mills v. United StatesSupreme Court of the United States · 1929
- Mayson Mfg. Co. v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1949
- Nemours Corporation v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 1963
- Wilson Bros. & Co. v. CommissionerCourt of Appeals for the Ninth Circuit · 1941
- Boyle Fuel Co. v. CommissionerUnited States Tax Court · 1969
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3Cited by21 opinions
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