U.S. Court of Appeals for the Fourth Circuit, 1965

GARDENS OF FAITH, INC. v. COMMISSIONER OF INTERNAL REVENUE

U.S. Court of Appeals for the Fourth Circuit · Decided March 18, 1965 · Sobeloff, Bell, Christie

345 F.2d 180; 15 A.F.T.R.2d (RIA) 646; 1965 U.S. App. LEXIS 6178 (Federal Reporter, Second Series)

Counsel

John Y. Merrell, Washington, D. C. (Paul P. Senio, Washington, D. C., on brief), for petitioners., Edward Heilbronner, Atty., Dept, of Justice (Louis F. Oberdorfer, Asst. Atty. Gen. and Lee A. Jackson and Harold C. Wilkenfeld, Attys., Dept, of Justice, on brief), for respondent.

Cases that cite this one

8 later published cases cite this decision.

McManus v. Commissioner (United States Tax Court 1981)
Rose Hills Memorial Park Ass'n v. United States (Court of Claims 1972)
Rose Hills Memorial Park Ass'n v. United States (Court of Claims 1972)
William S. Peterson and Betty M. Peterson v. Commissioner of Internal Revenue (9th Cir. 1967)
Sherwood Memorial Gardens, Inc., (Tennessee) v. Commissioner of Internal Revenue (7th Cir. 1965)
Peterson v. Commissioner (United States Tax Court 1965)
Peterson v. Commissioner (United States Tax Court 1965)
Roe v. Commissioner (United States Tax Court 1965)

This list shows which later cases cite this one. It does not say how they treated it, and no review of that has been done. Not a substitute for Shepard’s or KeyCite — verify before relying.

Opinion

PER CURIAM:

Raymond F. Cushing and wife were instrumental in organizing two cemetery corporations, Gardens of Faith, Inc., and Evergreen Memorial Gardens, Inc. The corporations issued certain “Certificates of Indebtedness” for undetermined amounts, which required them to pay to the certificate holders 25% of the base sales price of every burial lot sold by the corporations for 50 years.

The issues in this appeal are the appropriate tax treatment of the sums thus paid, both in the corporations’ returns and those of the certificate holders, Cush *181 ing and wife. The Commissioner of Internal Revenue contends that the certificate holders are equity investors in the respective corporations and therefore the corporations are not entitled to deduct as land costs the payments máde to the certificate holders, and that amounts received by the individual taxpayers with respect to the “Certificates of Indebtedness” are, to the extent of the corporate earnings and profits, taxable as dividends. The court upheld the Commissioner’s contentions. 1964 P-H T. C. Memo, Dec., Par. 64, 178.

The opposing arguments addressed to us by the taxpayers in their brief and oral presentation are fairly stated and convincingly answered in the exhaustive opinion of the Tax Court. This case presents a mixed question of law and fact. The correct legal principle was followed and the resolution of the factual issue by the Tax Court was warranted.

Affirmed.

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