Keystone Fruit Co. v. Commissioner

Board of Tax Appeals

Keystone Fruit Co. v. Commissioner

2 B.T.A. 301, 1925 BTA LEXIS 2450

CourtUnited States Board of Tax Appeals

DecidedJuly 11, 1925

DocketDocket No. 1642.

StatusPublished

Cited by1 cases

This text of 2 B.T.A. 301 (Keystone Fruit Co. v. Commissioner) is published on Counsel Stack Legal Research, covering United States Board of Tax Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Keystone Fruit Co. v. Commissioner, 2 B.T.A. 301, 1925 BTA LEXIS 2450 (bta 1925).

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Opinion

This appeal involves a deficiency in income and profits taxes of $2,208.75 for the calendar year 1919, and is based upon the disal-lowance by the Commissioner of a claimed paid-in surplus of $100,000 which was claimed by the taxpayer in its return for the taxable year involved.

FINDINGS OP PACT.

The taxpayer is a corporation organized under the laws of Washington with its principal office at Spokane. It was organized to take over a fruit orchard, land, and property in connection therewith, at Entiat, Wash. The land had been purchased in 1906 by H. J. Shinn and N. F. Esseck. It was developed and set in trees by them. The first purchase was of approximately 400 acres. They subsequently purchased other land for the purpose of building an irrigation dam and ditch. Shinn provided two-thirds of the funds and Esséck one-third, and they had proportionate interests in the property. Shinn provided the money for the trees, which consisted principally of apple trees. During the first year or year and a half they planted approximately 100 acres of apple trees, pear trees, and peach trees, about 90 per cent of which were apple trees.

In 1909 Shinn and Esseck formed a corporation. In going over the records of expenditures Shinn found that he had invested for the land and improvements approximately $58,000. Esseck had no accurate record of his expenditures. It is not clear whether the $53,000 above mentioned included all expenditures or those of Shinn alone. When the corporation was formed it had capital stock of $50,000, consisting of 500 shares of $100 par value each. Shinn was issued two-thirds of the stock, Esseck one-third. Shinn then presented H. N. Metzger with one share and Metzger was elected secretary of the corporation.

DECISION.

The determination of the Commissioner is approved.

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This appeal involves a deficiency in income and profits taxes of $2,208.75 for the calendar year 1919, and is based upon the disal-lowance by the Commissioner of a claimed paid-in surplus of $100,000 which was claimed by the taxpayer in its return for the taxable year involved.

FINDINGS OP PACT.

The taxpayer is a corporation organized under the laws of Washington with its principal office at Spokane. It was organized to take over a fruit orchard, land, and property in connection therewith, at Entiat, Wash. The land had been purchased in 1906 by H. J. Shinn and N. F. Esseck. It was developed and set in trees by them. The first purchase was of approximately 400 acres. They subsequently purchased other land for the purpose of building an irrigation dam and ditch. Shinn provided two-thirds of the funds and Esséck one-third, and they had proportionate interests in the property. Shinn provided the money for the trees, which consisted principally of apple trees. During the first year or year and a half they planted approximately 100 acres of apple trees, pear trees, and peach trees, about 90 per cent of which were apple trees.

In 1909 Shinn and Esseck formed a corporation. In going over the records of expenditures Shinn found that he had invested for the land and improvements approximately $58,000. Esseck had no accurate record of his expenditures. It is not clear whether the $53,000 above mentioned included all expenditures or those of Shinn alone. When the corporation was formed it had capital stock of $50,000, consisting of 500 shares of $100 par value each. Shinn was issued two-thirds of the stock, Esseck one-third. Shinn then presented H. N. Metzger with one share and Metzger was elected secretary of the corporation.

DECISION.

The determination of the Commissioner is approved.

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Bluebook (online)

2 B.T.A. 301, 1925 BTA LEXIS 2450, Counsel Stack Legal Research, https://law.counselstack.com/opinion/keystone-fruit-co-v-commissioner-bta-1925.

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