106 T.C. No. 27
UNITED STATES TAX COURT
CONNECTICUT MUTUAL LIFE INSURANCE COMPANY AND CONSOLIDATED
SUBSIDIARIES, Petitioner v. COMMISSIONER OF INTERNAL REVENUE,
Respondent
Docket No. 4291-94. Filed June 26, 1996.
P created a voluntary employees' beneficiary
association (VEBA) trust designed to fund P's future
holiday pay obligations to its employees. On or about
Dec. 27, 1985, P contributed $20 million to the VEBA.
This $20 million contribution significantly exceeded
the amount of P's average annual holiday pay
obligation, which was approximately $2 million. P
deducted the entire $20 million contribution as an
ordinary and necessary business expense on its 1985
Federal income tax return.
Held: P's $20 million contribution to the VEBA in
1985 provided P with substantial future benefits. P is
therefore not entitled to deduct its $20 million
contribution in 1985. INDOPCO, Inc. v. Commissioner,
503 U.S. 79 (1992), applied.
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