# Armston v. Commissioner

> United States Tax Court · March 31, 1949 · 12 T.C. 539

URL: https://www.frixlaw.com/law-library/cases/4474378

## Case

- **Full name:** Catherine G. Armston v. Commissioner of Internal Revenue, W. H. Armston Co., Inc. v. Commissioner of Internal Revenue
- **Court:** United States Tax Court
- **Decided:** March 31, 1949
- **Citations:** 12 T.C. 539; 1949 U.S. Tax Ct. LEXIS 233
- **Precedential status:** Published
- **Opinion:** Dissent by Arundell
- **Judges:** Arundell
- **Cited by:** 2 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/4474378

## Opinion text

Arundell, J., dissenting: It would seem to me that the question posed in this case is whether or not there was a definitive disposition of the machinery by the corporation to Catherine Armston. If, as a result of the transaction, Mrs. Armston became the owner of the property, the rental paid for its use in the business, at OPA prices, would seem to constitute an ordinary and necessary expense. The reason advanced for concluding that the rental may not be deducted is that the sale to Catherine Armston was coupled with an agreement to lease the property back to the corporation, and the net effect of such a transaction is that the seller continues “for tax purposes” to own the property. It is true that this reasoning finds support in A. A. Skemp, 8 T. C. 415 , but that decision was reversed by the Seventh Circuit Court of Appeals in Skemp v. Commissioner, 168 Fed. (2d) 598, and, as in my opinion the reasoning of the higher court is correct, I disagree with the conclusion reached by the majority in this case. The majority opinion recognizes that as between the parties to the transaction the obligation of the company to pay a rental may be enforced.
Van Fossan and Murdock, JJ., agree with this dissent.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/4474378. Public record. Not legal advice.