Ray's Clothes, Inc. v. Commissioner
United States Tax Court
Respondent determined that petitioner was entitled to deduct as rental expense, for each of its fiscal years ended June 30, 1947, through 1950, only $ 10,000 rather than the greater amounts paid to lessor corporation under a percentage lease with a minimum agreed rental of $ 10,000 per annum.
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Respondent determined that petitioner was entitled to deduct as rental expense, for each of its fiscal years ended June 30, 1947, through 1950, only $ 10,000 rather than the greater amounts paid to lessor corporation under a percentage lease with a minimum agreed rental of $ 10,000 per annum. Held, had petitioner and lessor corporation dealt at arm's length petitioner would not have been "required," under section 23 (a) (1) (A) of the 1939 Code, to pay rent in excess of $ 6,000 per annum until January 1, 1948, the termination date of the unexpired lease from the former owner. From and after…
1Opinion of the Court
OPINION.
Black, Jvdge:
Respondent has determined that, for each of its fiscal years 1947 through 1950, petitioner may only deduct, under section 23 (a) (1) (A) of the 1939 Internal Revenue Code,2 $10,000 of the rent paid the lessor corporation under a lease providing for annual rental payments of 6 per cent of gross sales, with a $10,000 minimum.
Lessor was formed to purchase the business property, 1901 Main Street, following an advantageous offer of sale thereof made to petitioner’s sole stockholders, David and Seeberg, by the former owner of the business property. At the time of that offer,…
2Cases cited8 opinions
- Place v. CommissionerUnited States Tax Court · 1951
- A. & A. Tool & Supply Co. v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1950
- Consolidated Apparel Co. v. CommissionerUnited States Tax Court · 1952
- White v. Fitzpatrick, Collector of Internal RevenueCourt of Appeals for the Second Circuit · 1951
- Consolidated Apparel Co. v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1953
3 more not listed; retrieve them via the Exa API.
3Cited by14 opinions
- B. Forman Co. v. CommissionerCourt of Appeals for the Second Circuit · 1972
- B. Forman Company, Inc. v. Commissioner of Internal Revenue, McCurdy & Company, Inc. v. Commissioner of Internal Revenue, B. Forman Company, Inc. v. Commissioner of Internal Revenue, McCurdy & Company, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1972
- Challenger, Inc. v. CommissionerUnited States Tax Court · 1964
- B. Forman Co. v. CommissionerUnited States Tax Court · 1970
- B. Forman Co. v. CommissionerUnited States Tax Court · 1970
9 more not listed; retrieve them via the Exa API.