Lohrke v. Commissioner
United States Tax Court
Petitioner was receiving a substantial amount of royalty income from the licensing of a patent on a process used in the synthetic fiber industry. Petitioner also had a substantial interest in a corporation that used this process in the conversion of synthetic fibers into fabrics. In 1961, the corporation made a shipment of defective fiber to a British corporation.
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Petitioner was receiving a substantial amount of royalty income from the licensing of a patent on a process used in the synthetic fiber industry. Petitioner also had a substantial interest in a corporation that used this process in the conversion of synthetic fibers into fabrics. In 1961, the corporation made a shipment of defective fiber to a British corporation. Petitioner agreed to assume personally any loss to the British corporation resulting from this shipment and in 1962 sent his personal check in the amount of $ 30,000 to cover the loss. Held, under the circumstances, petitioner's…
1Opinion of the Court
Simpson, Judge:
The respondent determined a deficiency in the petitioners’ income tax in the amount of $24,559.91 for the taxable year 1962. The only issue for decision is whether a payment made by the petitioner to a customer of a corporation in which the petitioner had a substantial interest was an ordinary and necessary expense of a trade or business operated by the petitioner as a proprietorship.
FINDINGS OP PACT
Some of the facts were stipulated, and those facts are so found.
The petitioners, James L. Lohrke and June M. Lohrke, are husband and wife who resided in West Chester, Pa., at the…
2Cases cited15 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Deputy, Administratrix v. Du PontSupreme Court of the United States · 1940
- Commissioner v. CulbertsonSupreme Court of the United States · 1949
- Moline Properties, Inc. v. CommissionerSupreme Court of the United States · 1943
- Charles Oran Mensik and Mary Mensik v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1964
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3Cited by99 opinions
- Newark Morning Ledger Company, a Corporation of the State of New Jersey v. The United States of AmericaCourt of Appeals for the Third Circuit · 1976
- Markwardt v. CommissionerUnited States Tax Court · 1975
- J.R. Betson, Jr. And Joan Sue Betson v. Commissioner of Internal Revenue ServiceCourt of Appeals for the Ninth Circuit · 1986
- Young & Rubicam, Inc. v. The United StatesUnited States Court of Claims · 1969
- Santa Anita Consol., Inc. v. CommissionerUnited States Tax Court · 1968
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