Miller-Smith Hosiery Mills v. Commissioner
United States Tax Court
Petitioner, a corporation manufacturing ladies hosiery, sold silk and nylon hosiery to one of its customers in 1945 under an arrangement whereby the customer remitted the full O. P. A. ceiling price plus five-sixths of his net profit to one of petitioner's officers. The latter turned over 90 per cent of the O. P. A. ceiling price to petitioner and, after deducting his expenses, divided the remainder among the officer-director stockholders of the corporation.
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Petitioner, a corporation manufacturing ladies hosiery, sold silk and nylon hosiery to one of its customers in 1945 under an arrangement whereby the customer remitted the full O. P. A. ceiling price plus five-sixths of his net profit to one of petitioner's officers. The latter turned over 90 per cent of the O. P. A. ceiling price to petitioner and, after deducting his expenses, divided the remainder among the officer-director stockholders of the corporation. Held, the entire profit on the sale represented taxable income to petitioner within the purview of section 22 (a), Internal Revenue Code.
1Opinion of the Court
OPINION.
Bruce, Judge:
The sole issue for decision is whether the entire profit realized on the sale of silk and nylon hosiery to Hartford in 1945 is taxable to petitioner. The question is essentially one of fact. Petitioner argues that the hosiery was sold through a “joint venture” or a “partnership” whose members were C. U. Smith, G. B. Smith, and Elizabeth S. Miller. Respondent contends that the transaction represented a sale by petitioner.
We have found as a fact that the sale was made by petitioner directly to Hartford, who was one of petitioner’s regular customers. The hosiery was boxed…
2Cases cited2 opinions
- United States v. Joliet & Chicago RailroadSupreme Court of the United States · 1942
- Essex Constr. Co. v. Commissioner (A)United States Tax Court · 1949
3Cited by1 opinion
- Miller-Smith Hosiery Mills v. CommissionerUnited States Tax Court · 1954