Limericks, Inc. v. Commissioner
United States Tax Court
Where the Commissioner has disallowed a deduction from income for a portion of payments made by a corporation which were designated rent, this Court may inquire as to what part, if any, of the amount so disallowed was in reality a disbursement of dividends, and it may approve or disapprove the whole or any portion of such disallowance, as a preponderance of the evidence justifies.
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Where the Commissioner has disallowed a deduction from income for a portion of payments made by a corporation which were designated rent, this Court may inquire as to what part, if any, of the amount so disallowed was in reality a disbursement of dividends, and it may approve or disapprove the whole or any portion of such disallowance, as a preponderance of the evidence justifies. Where the majority stockholder, with his wife, owned all of the stock of the corporation except qualifying shares, and he also owned real estate which he had purchased for $ 50,700 and immediately rented to the…
1Opinion of the Court
OPINION.
Hablan, Judge-.
The most fundamental consideration in the determination of the nature of the payments made by Limericks, Inc., to G. L. Limerick is the relationship of G. L. Limerick to the corporation, as it is obvious that payments made on contracts negotiated at arm’s length may have an entirely different character than payments made between a corporation and its sole stock owner.
In this case G. L. Limerick owned a building and a furniture business located therein in the year 1937. In 1938 the furniture business was acquired by a corporation the stockholders of which consisted of…
2Cited by59 opinions
- Place v. CommissionerUnited States Tax Court · 1951
- Drobny v. CommissionerUnited States Tax Court · 1986
- Levenson & Klein, Inc. v. CommissionerUnited States Tax Court · 1977
- American Metal Products Corp. v. CommissionerUnited States Tax Court · 1960
- Consolidated Apparel Co. v. CommissionerUnited States Tax Court · 1952
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