Bentley v. Commissioner
United States Tax Court
Petitioners for some years had been carrying on a business in corporate form. They were dissatisfied with the small amount of profits left to them after taxes and wanted to sell or liquidate the corporation. At the suggestion of their tax counsel, the corporation was liquidated and the wives of petitioners formed a partnership and entered into an agreement with their husbands, the petitioners, to continue to operate the business on a salary.
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Petitioners for some years had been carrying on a business in corporate form. They were dissatisfied with the small amount of profits left to them after taxes and wanted to sell or liquidate the corporation. At the suggestion of their tax counsel, the corporation was liquidated and the wives of petitioners formed a partnership and entered into an agreement with their husbands, the petitioners, to continue to operate the business on a salary. The assets of the former corporation were rented from its stockholders. The transaction resulted in no change in policy or interruption in the operation…
1Opinion of the Court
OtlNION.
ARUNDell, Judge:
The principal issue in this case is whether petitioners may be taxed on the profits of the Hoosick Engineering Co. or whether they are taxable only on their respective salaries and bonuses from that company.
The petitioners have been engaged in the automobile spare parts and engineering business since the early 1920’s, and have been associated with each other since the late 1920’s. They have been together in the Hoosick Engineering Co. itself, which they have operated since 1939. Over the course of the years they acquired considerable knowledge of and skill in the…
2Cases cited3 opinions
- Burnet v. LeiningerSupreme Court of the United States · 1932
- Werner v. CommissionerUnited States Tax Court · 1946
- Visintainer v. CommissionerUnited States Tax Court · 1949
3Cited by3 opinions
- Bentley v. CommissionerUnited States Tax Court · 1950
- Zabolotny v. CommissionerUnited States Tax Court · 1991
- Zabolotny v. CommissionerUnited States Tax Court · 1991