Family Record Plan, Inc. v. Commissioner

In this petition to review decisions of the Tax Court, the problem presented is strikingly similar to that dealt with by us in Commissioner of Internal Revenue v. Kuckenberg, 309 F.2d 202 , decided October 11, 1962.

Family Record Plan, Incorporated (dissolved), here referred to as Transferor, and Family Record Plan, Incorporated (formerly F.R.P., Inc.), here referred to as Transferee, are the petitioners. There is no substantial dispute as to the material facts.

The period in question is the tax year of Transferor, September 1, 1954 to February 28, 1955. It had for some years been in the business of selling to members of the public the right (represented by a certificate and embodied in a written contract) to have portrait photographs taken at stated intervals, free, by a studio in the customers’ vicinity, and an album in which to mount the photographs so taken. A small down payment (usually $5.00 or $10.00) was made, and the balance was payable, usually at $5.00 per month, over a period, the length of which depended upon which of two types of contracts was used. The maximum contract period was nine months. Transferor carried no stock of albums; it ordered an album from the…