Lido Bldg. Co. v. Commissioner
United States Board of Tax Appeals
Where a corporation unable to advance funds to carry on litigation in defense of its title to a lease, constituting its sole asset, agrees with a stockholder that if he will advance the funds necessary for such purpose it will turn over to him 60 percent "of any of the net proceeds derived either from said litigation by settlement or for the sale of said lease", the amount paid by the corporation to the stockholder representing 60 percent of the amount realized from the…
Read the full summary
Where a corporation unable to advance funds to carry on litigation in defense of its title to a lease, constituting its sole asset, agrees with a stockholder that if he will advance the funds necessary for such purpose it will turn over to him 60 percent "of any of the net proceeds derived either from said litigation by settlement or for the sale of said lease", the amount paid by the corporation to the stockholder representing 60 percent of the amount realized from the successful termination of the litigation constitutes additional cost of the lease to be taken into account in the…
1Opinion of the Court
OPINION.
Smith:
This is a proceeding for the redetermination of a deficiency in income tax for 1927 in the amount of $5,465.70. The petition alleges that the respondent erred in the determination of the deficiency—(a) * * * in ruling and deciding that there was a gain on the sale of lease of $43,937.16.(b) * * * in ruling and deciding that the matter of the Lee Bros. Inc. lease was a corporate transaction, and in refusing to recognize the assignment of three-fifths of the corporation’s right, title and interest in the lease to Robert B. Bowler, which transfer was made for a valuable…
2Cases cited3 opinions
- First National Bank v. Commercial Travelers' Home Ass'n of AmericaAppellate Division of the Supreme Court of the State of New York · 1905
- First National Bank v. Commercial Travelers' Home Ass'n of AmericaNew York Court of Appeals · 1906
- H. Remington & Son Pulp & Paper Co. v. CaswellAppellate Division of the Supreme Court of the State of New York · 1908
3Cited by1 opinion
- Lido Bldg. Co. v. CommissionerUnited States Board of Tax Appeals · 1934