Nassau Suffolk Lumber & Supply Corp. v. Commissioner
United States Tax Court
In an agreement for the sale of a fuel business, the purchaser agreed to make installment payments amounting to $ 23,787.50 and to pay an annual "license royalty" for 99 years, the amount of each royalty to be determined by the annual sales volume of the fuel business, but in no event would the royalty be less than $ 7,500 per annum. Held: In the circumstances of this case, the seller retained a continuing interest in the fuel business.
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In an agreement for the sale of a fuel business, the purchaser agreed to make installment payments amounting to $ 23,787.50 and to pay an annual "license royalty" for 99 years, the amount of each royalty to be determined by the annual sales volume of the fuel business, but in no event would the royalty be less than $ 7,500 per annum. Held: In the circumstances of this case, the seller retained a continuing interest in the fuel business. The "royalty" payments are deductible by the purchaser or his assignee-subchapter S corporation as ordinary and necessary business expenses and represent…
1Opinion of the Court
OPINION
Raum, Judge:
The Commissioner determined deficiencies in petitioners’ income tax as follows:
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The cases have been consolidated for trial and involve the tax treatment of annual payments made to petitioner Nassau Suffolk Lumber & Supply Corp. (Supply) by the Nassau Suffolk Fuel Corp. (Fuel), a subchapter S corporation, the stock of which was owned by petitioners George J. Koopmann (Koopmann) and his wife, Annette C. Koopmann. The positions of Supply and the Koopmanns are antagonistic to one another, and the real controversy herein is between them. The Government’s position is…
2Cases cited11 opinions
- Michaels v. CommissionerUnited States Tax Court · 1949
- Toledo Newspaper Co. v. CommissionerUnited States Tax Court · 1943
- James H. Pickren and Lucie B. Pickren v. United StatesCourt of Appeals for the Fifth Circuit · 1967
- Olin Bryant and Vanell Bryant v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1968
- Vermont Transit Co. v. CommissionerUnited States Tax Court · 1953
6 more not listed; retrieve them via the Exa API.
3Cited by6 opinions
- Leisure Dynamics, Inc. v. CommissionerUnited States Tax Court · 1973
- Standard Oil Co. (Indiana) v. CommissionerUnited States Tax Court · 1970
- Standard Oil Co. v. CommissionerUnited States Tax Court · 1970
- Nassau Suffolk Lumber & Supply Corp. v. CommissionerUnited States Tax Court · 1969
- Royal Arrow Co. v. CommissionerUnited States Tax Court · 1972
1 more not listed; retrieve them via the Exa API.