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DRAFT FOR ATTORNEY REVIEW — NOT FINAL

Vericoals, Inc. v. Revenue Cabinet, 869 S.W.2d 49 (1994)

Citation
Vericoals, Inc. v. Revenue Cabinet, 869 S.W.2d 49 (1994)
Parent Document
Vericoals, Inc. v. Revenue Cabinet, 869 S.W.2d 49 (1994)
Jurisdiction
Kentucky (state)
Effective Date
1994-01-28

Other Sections in This Document (31)

Full Text

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Finally, the proceeds Vericoals received from Unit Coal were not an arm’s length royalty referred to in KRS 143.-010(10). A party receiving only an arm’s *53length royalty does not have the economic interest. Verieoals reported these proceeds as gross receipts and not as royalties on its corporate income tax return; the line for royalties was left blank. There was testimony that the amounts received were almost twice the amount of an average royalty. A taxpayer must accept the tax consequences when he chooses to organize his affairs in a particular manner. Cf. Higgins v. Smith, 308 U.S. 473, 477, 60 S.Ct. 355, 357, 84 L.Ed. 406 (1940).