Valetti v. Commissioner
United States Tax Court
From 1948 to 1951, inclusive, petitioner was engaged in business as a ship chandler. It was a customary practice in the trade for chandlers to pay the officers of ships which they supplied, a commission which normally averaged 5 per cent of the amount of merchandise sold. On his returns for 1948 to 1951, inclusive, petitioner claimed deductions for commission payments which averaged approximately 16, 17, 14, and 9 per cent, respectively, of sales made during such years.
Read the full summary
From 1948 to 1951, inclusive, petitioner was engaged in business as a ship chandler. It was a customary practice in the trade for chandlers to pay the officers of ships which they supplied, a commission which normally averaged 5 per cent of the amount of merchandise sold. On his returns for 1948 to 1951, inclusive, petitioner claimed deductions for commission payments which averaged approximately 16, 17, 14, and 9 per cent, respectively, of sales made during such years. Held, commission payments to the officers of ships are an ordinary and necessary business expense of a ship chandler. Held,…
1Opinion of the Court
OPINION.
Rice, Judge:
The first issue raised in this proceeding is whether commissions, in whatever amount, paid by petitioner to officers of ships which he supplied were deductible as ordinary and necessary business expenses within the meaning of section 23 (a) (1) (A). Petitioner established by an overwhelming preponderance of the evidence that the payment of such commissions is a universal practice in his business, not only in the United States but throughout the world. The respondent has not argued that such payments contravene or frustrate any sharply defined national or State policy, and…
2Cases cited3 opinions
- Lilly v. CommissionerSupreme Court of the United States · 1952
- Kurnick v. CommissionerUnited States Tax Court · 1955
- Gilbert Delgado v. United StatesCourt of Appeals for the Ninth Circuit · 1960
3Cited by20 opinions
- Ward v. CommissionerUnited States Tax Court · 1986
- Estate of Falese v. CommissionerUnited States Tax Court · 1972
- Pendola v. CommissionerUnited States Tax Court · 1968
- Frederick Steel Co. v. CommissionerUnited States Tax Court · 1964
- Richardson v. CommissionerCourt of Appeals for the Fourth Circuit · 1959
15 more not listed; retrieve them via the Exa API.