Brown v. Helvering

An unincorporated concern known as Edward Brown & Sons, of San Francisco, has since 1896 acted as Pacific Coast General Agent for fire insurance companies. 1 In 1923, Arthur M. Brown conducted the concern alone. In 1925 and 1926, he and his son Arthur M. Brown, Jr. conducted it as partners. The general agent receives as compensation from its principals, among other things, a so-called “ overriding commission ” on the net premiums derived from business written through the local agents. The question for decision is, how the income of the petitioner, Arthur M. Brown, derived from overriding…