Supreme Court of the United States
United States v. Basye
February 27, 1973410 U.S. 441
Summary
The Court held that payments made by Kaiser into a retirement trust for physicians associated with the Permanente partnership were compensation for services and therefore income of the partnership, even though the payments were made directly to the trust. The individual partners were taxable on their proportionate shares of that partnership income regardless of whether the amounts were distributed or whether their eventual receipt was contingent or forfeitable. The Court reversed and remanded for entry of judgment for the United States.
Holding
- Whether payments made directly into the retirement trust were partnership income. Kaiser’s payments into the retirement trust were compensation for services rendered by Permanente and constituted income of the partnership, notwithstanding that the partnership did not directly receive the funds.
- Whether the individual partners were taxable on their shares of the retirement-fund income. Each partner was taxable on the partner’s distributive share of the partnership income regardless of whether the income was actually distributed or whether the partner’s ultimate receipt of retirement benefits was uncertain or subject to forfeiture.
Docket 71-1022
Cited authorities
- 26 U.S.C. § 701
- 26 U.S.C. §61
- 26 U.S.C. §§ 61
- Treas. Reg. § 1.702-1
- 26 C.F.R. § 1.702-1
- 26 U.S.C. § 482
- 26 U.S.C. §703
- Pub. L. 87-792, 76
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