Opinion ID: 243983
Heading Depth: 2
Heading Rank: 1

Heading: Ownership of Interest in Card Club

Text: 22 We will dispose of the card club ownership first. It is argued that the taxpayer did not receive any profits from the Club. 23 The finding as to his interest in the Club is amply sustained in the record. There is on file an amendment to the Articles of Incorporation of the Club signed and verified by the taxpayer on January 1, 1951, which shows his ownership of a 5% interest in the net profits of the club as a limited partner. This was a gift to him by another of the partners. The amended articles were filed in the official records of Los Angeles County on February 5, 1951. The income tax return filed by the Club showed the sum of $1,116.54 as his distributive share of the profits for the year 1951. On March 10, 1952, the accountant for the Club notified the taxpayer of that fact, showing the figures that he should use on his personal return, as he testified at the trial. So the Tax Court was right in considering this unreported amount in determining the taxable income.