American Foundry v. Commissioner
United States Tax Court
1. The salary of a corporate officer, who held 79 1/2 percent of the outstanding stock, was continued after he suffered a stroke. Held, the continued salary did not qualify for exclusion from the officer-shareholder's gross income under sec. 104(a)(1), 105(c), or 105(d). Held, further, the continued salary did not constitute compensation for the past services of the officer-shareholder or compensation for the past or present services of his wife.
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1. The salary of a corporate officer, who held 79 1/2 percent of the outstanding stock, was continued after he suffered a stroke. Held, the continued salary did not qualify for exclusion from the officer-shareholder's gross income under sec. 104(a)(1), 105(c), or 105(d). Held, further, the continued salary did not constitute compensation for the past services of the officer-shareholder or compensation for the past or present services of his wife. The continued salary was a dividend to the shareholder and did not constitute an ordinary and necessary business expense of the corporation…
1Opinion of the Court
Queadt, Judge:
Eespondent has determined deficiencies in income taxes from the petitioners for the years specified as follows:
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The deficiencies determined to be due from American Foundry for its taxable years 1962, 1963, and 1964 are due solely to the disallowance of net operating losses carried back from its taxable years 1965, 1966, and 1967. Our disposition of the issues for decision in the later years will resolve the tax liability for 1962,1963, and 1964 and will be reflected in the Eule 50 computation.
Concessions having been made by the parties, the issues remaining for our…
2Cases cited15 opinions
- Lucas v. Ox Fibre Brush Co.Supreme Court of the United States · 1930
- California Vegetable Concentrates, Inc. v. CommissionerUnited States Tax Court · 1948
- Alan B. Larkin v. Commissioner of Internal RevenueCourt of Appeals for the First Circuit · 1968
- Lang v. CommissionerUnited States Tax Court · 1963
- Kaufman v. CommissionerUnited States Tax Court · 1961
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3Cited by37 opinions
- American Foundry, a Corporation v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1976
- Gordon v. CommissionerUnited States Tax Court · 1987
- Laverty v. CommissionerUnited States Tax Court · 1973
- RTS Inv. Corp. v. CommissionerUnited States Tax Court · 1987
- Alma Piston Co. v. CommissionerUnited States Tax Court · 1976
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