Taxpayer, Mr. Duberstein Iron And Mohawk Metal Corporation

The case is about a taxpayer, Mr. Duberstein, who was president of Duberstein Iron & Metal Company. As a result, he did business with Mohawk Metal Corporation in which he was an acquaintance with the president of the corporation Mr. Berman for several years. Furthermore, in exchange for information of potential customers, Berman gave Duberstein a Cadillac. Although the taxpayer did not want to accept the automobile, he ultimately gave in upon Berman’s insistence. Thus, Mohawk Metal Corporation deducted the Cadillac as a business expense on its corporate income tax return and the taxpayer did not include the value of the Cadillac in his gross income.
Moreover, the issue was whether the Cadillac was truly a nontaxable gift or a taxable payment