Orange & Domestic Laundry Co. v. Commissioner

Board of Tax Appeals

Orange & Domestic Laundry Co. v. Commissioner

6 B.T.A. 646, 1927 BTA LEXIS 3439

CourtUnited States Board of Tax Appeals

DecidedMarch 30, 1927

DocketDocket No. 8554.

StatusPublished

Cited by1 cases

This text of 6 B.T.A. 646 (Orange & Domestic Laundry 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

Orange & Domestic Laundry Co. v. Commissioner, 6 B.T.A. 646, 1927 BTA LEXIS 3439 (bta 1927).

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Opinion

OPINION.

ARUndell:

Petitioner urges that it be permitted to deduct as an ordinary and necessary expense the sum of $3,000, representing what it contends to be the reasonable rental value of the real estate occupied by it and owned by its sole stockholder. The only evi[648]*648dence of the rental value of the premises offered was the amount paid to Mrs. Gill for a few months in an earlier year. During the taxable year petitioner neither paid nor entered on its books an amount evidencing that it owed rent, and in fact it never did at a later date pay any amount to its sole stockholder for the use of the real estate occupied by it. Section 234(a) (1) of the Revenue Act of .1918 provides that in computing the net income of a corporation there shall be allowed as a deduction “ all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, * * * including rentals or other payments required to be made as a condition to the continued use or possession of the property * * The amount sought to be deducted in the instant case as rental for the buildings occupied by petitioner was not paid nor was there any obligation incurred to pay $3,000 to Mrs. Gill during the taxable year.

Judgment will be entered for the respondent.

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OPINION.

ARUndell:

Petitioner urges that it be permitted to deduct as an ordinary and necessary expense the sum of $3,000, representing what it contends to be the reasonable rental value of the real estate occupied by it and owned by its sole stockholder. The only evi[648]*648dence of the rental value of the premises offered was the amount paid to Mrs. Gill for a few months in an earlier year. During the taxable year petitioner neither paid nor entered on its books an amount evidencing that it owed rent, and in fact it never did at a later date pay any amount to its sole stockholder for the use of the real estate occupied by it. Section 234(a) (1) of the Revenue Act of .1918 provides that in computing the net income of a corporation there shall be allowed as a deduction “ all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, * * * including rentals or other payments required to be made as a condition to the continued use or possession of the property * * The amount sought to be deducted in the instant case as rental for the buildings occupied by petitioner was not paid nor was there any obligation incurred to pay $3,000 to Mrs. Gill during the taxable year.

Judgment will be entered for the respondent.

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Bluebook (online)

6 B.T.A. 646, 1927 BTA LEXIS 3439, Counsel Stack Legal Research, https://law.counselstack.com/opinion/orange-domestic-laundry-co-v-commissioner-bta-1927.

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