Hensel Phelps Constr. Co. v. Commissioner
United States Tax Court
Petitioner agreed to construct an office building for no profit in exchange for an interest in partnership capital. Held, on the facts, petitioner must include the value of the partnership interest in taxable income in the year that the partnership agreement was executed. Held, further, the value of that interest to be recognized as income to petitioner is equal to the value of the services exchanged for it by petitioner in an arm's-length agreement.
1Opinion of the Court
Featherston, Judge:
In these consolidated cases, respondent determined deficiencies in Federal income tax in the following amounts:
Docket No. FYE May 31— Deficiency
10685-78.1974 $110,857
11695-78.1975 72,389
1976 2,314
Concessions having been made, the issues remaining for decision are:(1) Whether petitioner received a partnership interest in exchange for services rendered in the tax year ended May 31, 1974; and(2) Alternatively, whether respondent correctly allocated income in the tax years in question from the partnership to petitioner under section 482.1
FINDINGS OF FACT
At the time of filing…
2Cases cited9 opinions
- Commissioner v. CulbertsonSupreme Court of the United States · 1949
- Commissioner v. TowerSupreme Court of the United States · 1946
- United States v. DavisSupreme Court of the United States · 1962
- Podell v. CommissionerUnited States Tax Court · 1970
- Olin Bryant and Vanell Bryant v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1968
4 more not listed; retrieve them via the Exa API.
3Cited by22 opinions
- Sparks v. CommissionerUnited States Tax Court · 1986
- Chef's Choice Produce, Ltd. v. CommissionerUnited States Tax Court · 1990
- Anthony Theophilos Patricia A. Theophilos v. Commissioner Internal Revenue ServiceCourt of Appeals for the Ninth Circuit · 1996
- Frazell v. CommissionerUnited States Tax Court · 1987
- Hensel Phelps Construction Company, and Cross-Appellee v. Commissioner of Internal Revenue, and Cross-AppellantCourt of Appeals for the Tenth Circuit · 1983
17 more not listed; retrieve them via the Exa API.