# G. F. Cotter Supply Co. v. Commissioner

> United States Board of Tax Appeals · May 6, 1925 · 1 B.T.A. 1108

URL: https://www.frixlaw.com/law-library/cases/4487138

## Case

- **Full name:** Appeal of G. F. COTTER SUPPLY CO.
- **Court:** United States Board of Tax Appeals
- **Decided:** May 6, 1925
- **Citations:** 1 B.T.A. 1108; 1925 BTA LEXIS 2656
- **Precedential status:** Published
- **Opinion:** Opinion of the court by Trammell
- **Judges:** Phillips, Sternhagen, Trammell, Tkammell
- **Cited by:** 0 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/4487138

## Opinion text

*1110 OPINION.
Trammell:
The taxpayer contends that it was a personal service corporation and as such was exempt from tax under the provisions of section 231 (14) of the Revenue Act of 1918.
It is the contention of the Commissioner that the income is not to be ascribed primarily to the activities of the principal owners or stockholders who were themselves regularly engaged in the active conduct of the affairs of the corporation.
The first statutory provision to be met, in order to entitle the corporation to classification as a personal service corporation, is that the income must be ascribed primarily to the activities of the principal stockholders. Mary F. Cotter was vice president and a director and an owner of at least 40 per cent of the stock of the corporation. She attended the directors’ meetings, which were held about once a year. She kept herself informed as to the activities of the corporation by reading statements and reports sent to her at her home by Elliott. She occasionally had personal conferences with Elliott at the office, but more usually at her home. She had an acquaintance with the customers during the lifetime of her husband and continued the acquaintance during the year involved. The income, however, was not attributable primarily to any services she rendered the corporation. She was not regularly engaged in the active conduct of the affairs of the corporation. The foregoing facts preclude the taxpayer from exemption as a personal service corporation, and it is not necessary to decide whether Elliott was the owner of the stock referred to in the contract of sale between him and Mary F. Cotter.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/4487138. Public record. Not legal advice.