Brief Fact Summary. Taxpayer and his wife were the only shareholders in corporation. The residence of taxpayer and his wife was transferred to the corporation as collateral for a bank loan. Taxpayer and his wife continued to occupy the property as their residence.
Synopsis of Rule of Law. Gross income may include benefits not inclusive of cash or receipt of property.
Equitable tolling is the exception rather than the rule; resort to its prophylaxis is deemed justified only in extraordinary circumstances.View Full Point of Law
Issue. Should the fair rental value of the property be considered income of the taxpayer?
Held. Circuit Judge Goodrich issued the opinion for the United States Third Court of Appeals in affirming that tax court and holding that taxpayer should report the fair rental value as income.
Discussion. The Court of Appeals found that the corporation’s existence was bona fide, the property belonged to the corporation because of the transfer, and taxpayer occupied the corporation’s real estate as his residen.