WALLPAPER ALBERT VAN LUIT COMPANY
The arm’s-length nature of the contract, in conjunction with the remarkable contributions and service of Van Luit provide, according to petitioner, more than ample support for the reasonableness of the compensation. The petitioner ultimately purchased such a press, with design and color production modifications caused by Van Luit’s work. As stated above, in he contributed the assets of the proprietorship to the partnership owned by Van Luit, Joseph Cannell, and North Baker, and the partnership was incorporated in Petitioner keeps its books and records, and reports its income using the accrual method of accounting and a calendar year basis. Attorney s appearing for the Case Don M. Cited Cases No Cases Found.
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Van Luit received a base salary plus 30 percent of the net profits of petitioner. The compensation paid by petitioner to Van Luit in and was reasonable within the meaning of section a 1.
Van Luit also instituted a program of quality control which enabled petitioner to guarantee relatively consistent color for bolts of wallpaper produced at different times. The members of the board agreed that Van Luit was entitled to the compensation payable under the formula.
Van Luit worked with designers to achieve the desired effects, and had complete control over the final decisions on color. As opposed to marketing high-quality wallpaper through interior designers, Van Luit conceived the idea of marketing his product through retail outlets. While petitioner also produces new selections every 2 to 3 years, its sample books continue to be commercially viable for up to 12 years. Click on the case name to see the full text of the citing case.
Listed below are the cases that are cited in this Featured Case. Basing our conclusion upon all luiy evidence of record, we hold that the compensation paid to Van Luit for and was reasonable.
Petitioner keeps its books and records, and reports its income using the accrual method of accounting and a calendar year basis.
Petitioner is alberg corporation with its principal offices and place of business in Los Angeles, California. The shareholders and the percentage of shares owned were:.
ALBERT VAN LUIT CO., INC. v. COMMISSIONER
These promotional and marketing innovations advanced petitioner’s position in the wall-covering industry and were key factors in petitioner’s high sales volume and high profit margin. United States Albrt Court. Petitioner contends that the contingent compensation plan herein at issue was a long-standing policy, and the product of an arm’s-length bargain between Van Luit and an independent majority of the board of directors.
The only issue for decision is the reasonableness alberrt compensation paid by petitioner to its chief executive and major shareholder. A scene is then printed on this compzny. Filed March 13, Beginning inVan Luit worked with an engineer, John Bruce, to develop a revolutionary silk screening process which utilized drying ovens in place of the older air-drying method which required a great deal of space and labor.
Moreover, and perhaps more significant, the compensation, apart from the bargain, was reasonable under all the circumstances. Because of his 35 years experience, he was personally a significant sales factor for petitioner.
ALBERT VAN LUIT CO., INC. | 34 T.C.M. () | etcm |
Petitioner maintains that the regulations, section 1. Van Luit died on May 28,at the age of Allman award in Listed below are those cases in which this Featured Case is cited. As stated above, in he contributed the assets of the proprietorship to the partnership owned by Van Luit, Joseph Cannell, and North Baker, and the partnership was incorporated in After high school, Van Luit attended art school for a more formal education in interior design.
InVan Luit caused petitioner to commence studies in design and engineering with a view to installing a Kidder Press. From the date of incorporation until March 10,these three shareholders comprised petitioner’s board of directors.
Due to Van Luit’s experience and extensive travel, he knew many wallpaper dealers and was thus able to establish a distribution system which still exists today.
VL213224, Eternity by Albert Van Luit & Co
Petitioner’s sales, taxable income, taxes paid, salaries paid to Van Luit and other shareholder-employees, dividends distributed, albeert net worth for through are as follows:.
The petitioner ultimately purchased such a press, with design and color production modifications caused by Van Luit’s work.
He possessed a genius for determining commercially salable design and color combinations. The compensation arrangement was the product of a free bargain between petitioner and Van Luit albet to secure “on fair and advantageous terms the services of the individual.