William S. Peterson and Betty M. Peterson v. Commissioner of Internal Revenue
Opinion
Opinion
Chambers, J.
William Peterson is a successful promoter of cemeteries. Like most of us, he doesn’t want to pay any higher income taxes than necessary.
At Kalispell, Montana, in 1955, he acquired initially ten acres of land for $2500. Then he and Mrs. Peterson set up a commercial corporation called Glacier Memorial Gardens of Kalispell, Inc. The two Petersons received the only stock is sued by the company for a total purchase price of $60.
A month after the acquisition of the land, it was deeded to the new corporation. Simultaneously, there was executed a “land purchase and financing agreement” between Peterson individually and his company, Glacier Gardens. This contract provided:
1. Glacier was to pay periodically to Peterson 20 per cent of the gross sales price of each burial lot sold from the originally transferred land and any subsequent additions thereto.
2. Glacier was to pay Peterson 10 per cent of the gross sales price of family memorials and markers sold at the cemetery.
3. The obligations to pay (1) and (2) above were to be represented by 100 equal “Registered Certificates of Indebtedness.” In due course, the certificates were issued.