Joy Mfg. Co. v. Commissioner
United States Tax Court
1. Income -- Accrual -- Fees -- Prior Commitment as to Use. -- Fees, which a wholly owned subsidiary agreed to pay to its parent for services, did not cease to be income to the parent on an accrual basis after the parent, in order to strengthen the credit of the subsidiary and to give it more capital, agreed to invest the fees, up to a stated amount, in capital stock of the subsidiary. 2. Income -- Accrual -- Fees -- Collectibility. -- There was no reason during the taxable…
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1. Income -- Accrual -- Fees -- Prior Commitment as to Use. -- Fees, which a wholly owned subsidiary agreed to pay to its parent for services, did not cease to be income to the parent on an accrual basis after the parent, in order to strengthen the credit of the subsidiary and to give it more capital, agreed to invest the fees, up to a stated amount, in capital stock of the subsidiary. 2. Income -- Accrual -- Fees -- Collectibility. -- There was no reason during the taxable years to doubt the ability of the subsidiary to pay the fees because of poor financial condition or business prospects.
1Opinion of the Court
Joy Manufacturing Company, Petitioner, v. Commissioner of Internal Revenue, Respondent
Joy Mfg. Co. v. Commissioner
Docket No. 49773
United States Tax Court
23 T.C. 1082; 1955 U.S. Tax Ct. LEXIS 214;
March 31, 1955, Filed
Decision will be entered for the respondent.
1. Income -- Accrual -- Fees -- Prior Commitment as to Use. -- Fees, which a wholly owned subsidiary agreed to pay to its parent for services, did not cease to be income to the parent on an accrual basis after the parent, in order to strengthen the credit of the subsidiary and to give it more capital, agreed to invest the fees, up to a…
2Cases cited1 opinion
- Joy Mfg. Co. v. CommissionerUnited States Tax Court · 1955