Facts
In Lohrke, the petitioner was a licensor and inventor as well as President for Lohrke Textiles, Inc. (Textiles). Although petitioner and Textiles are separate taxable entities, petitioner paid for the damages caused by a defective shipment of fiber for which he owned the patent which created it. Petitioner felt that to protect his business it was both "ordinary and necessary" to reimburse the customers to save his business reputation. The respondent argued that because petitioner was not obligated to pay, this payment did not fall under the definition of an "ordinary and necessary" business expense found in 26 U.S.C.S. ยง 162(a) and should consequently not be deductible.
Read more about this topic: Lohrke V. Commissioner
Famous quotes containing the word facts:
“Modern morality and manners suppress all natural instincts, keep people ignorant of the facts of nature and make them fighting drunk on bogey tales.”
—Aleister Crowley (1875–1947)
“In spite of the air of fable ... the public were still not at all disposed to receive it as fable. I thence concluded that the facts of my narrative would prove of such a nature as to carry with them sufficient evidence of their own authenticity.”
—Edgar Allan Poe (1809–1849)
“A pun does not commonly justify a blow in return. But if a blow were given for such cause, and death ensued, the jury would be judges both of the facts and of the pun, and might, if the latter were of an aggravated character, return a verdict of justifiable homicide.”
—Oliver Wendell Holmes, Sr. (1809–1894)