Borge v. Commissioner
United States Court of Appeals for the Second Circuit
405 F.2d 673 (1968)
Borge (plaintiff) produced and sold poultry. He sustained considerable losses each year. In 1958, Borge formed Danica Enterprises, Inc. (Danica) and transferred the poultry business to the corporation. At the time, Borge earned substantial income as an entertainer. He assigned to Danica the rights to his services as an entertainer for five years in exchange for an annual salary of $50,000. Danica received entertainment profits far greater than the $50,000 it paid to Borge. Because of this, Danica was able to offset its losses from the poultry business against the entertainment profits it received through Borge. During this period, Danica’s sole source of income was from Borge’s entertainment profits. But Danica did not arrange any entertainment contracts for Borge or provide any other assistance to Borge in his entertainment business. During the five-year period from 1958–1962, Borge generated an average of $166,465 in income for Danica. Under 26 U.S.C. § 482, the Commissioner (defendant) designated $75,000 of Danica’s annual income from 1958–1961, and $25,000 of Danica’s income for 1962, as personal income to Borge.
Rule of Law
Holding and Reasoning (Hays, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 97,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students. Read more about Quimbee.
Here's why 170,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 13,800 briefs, keyed to 187 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.