Bachrach v. Commissioner
United States Tax Court
1. Petitioner and his three associates over a period of years organized corporations to hold and manage tenement properties. They followed a pattern of undercapitalizing corporations and, pursuant to agreement after incorporation, advanced funds in proportion to their holdings with which to acquire the properties sought and for additional working capital.
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1. Petitioner and his three associates over a period of years organized corporations to hold and manage tenement properties. They followed a pattern of undercapitalizing corporations and, pursuant to agreement after incorporation, advanced funds in proportion to their holdings with which to acquire the properties sought and for additional working capital. The properties usually had one or more mortgages running from two to five years which were seldom paid out, the intention of the stockholders being, after operation costs, to divide proportionately the income of the corporation. The advances…
1Opinion of the Court
OPINION.
Turner, Judge:
Petitioner contends that he is entitled to the deductions of both amounts for the reasons that the sum of $2,467.71 was a business bad debt that resulted from the worthlessness of alleged loans which he had made to that extent to the Est Company and the amount of $525 was a loss he had sustained by giving his promissory note in guaranty of payment of that much of a mortgage owed by Dune Kealty Corporation, which resulted in the corporation’s property being released from the mortgage.
The first question is whether the advances were contributions to capital or loans. If…
2Cases cited14 opinions
- John Kelley Co. v. CommissionerSupreme Court of the United States · 1946
- Eckert v. BurnetSupreme Court of the United States · 1931
- Helvering v. PriceSupreme Court of the United States · 1940
- Schnitzer v. CommissionerUnited States Tax Court · 1949
- Dobkin v. CommissionerUnited States Tax Court · 1950
9 more not listed; retrieve them via the Exa API.
3Cited by27 opinions
- Nelson v. CommissionerUnited States Tax Court · 1952
- Aqualane Shores, Inc. v. CommissionerUnited States Tax Court · 1958
- Miele v. CommissionerUnited States Tax Court · 1971
- J. A. Maurer, Inc. v. CommissionerUnited States Tax Court · 1958
- Estate of Miller v. CommissionerUnited States Tax Court · 1955
22 more not listed; retrieve them via the Exa API.