Open Access. Powered by Scholars. Published by Universities.®

Law Commons

Open Access. Powered by Scholars. Published by Universities.®

Taxation-Federal

University of Michigan Law School

1949

Indirect control

Articles 1 - 1 of 1

Full-Text Articles in Law

Taxation-Income Tax-Taxable Persons--Assignment Of License Royalties, J. R. Mackenzie S.Ed. Jan 1949

Taxation-Income Tax-Taxable Persons--Assignment Of License Royalties, J. R. Mackenzie S.Ed.

Michigan Law Review

X contracted with a corporation controlled by him for the manufacture of machines on which he held patents. No minimum was established with respect to production or the payment of royalties. The contracts were terminable by either party upon notice, and X was free to make similar contracts with other manufacturers. X assigned all his interest in the contracts and exclusive title and power over the royalties to his wife, who thereafter received all payments and reported them as her income. The Tax Court ruled that since X could cancel the contracts directly, and could indirectly control the contracts through …