Frank Lyon Co. v. United States
So, there was a company called Frank Lyon Co. and they made deals with banks where they would buy their leases and then sell them to investors for a higher price. Basically, they were middlemen.
The United States government didn't like this and said that Frank Lyon Co. was trying to cheat them out of some taxes. Frank Lyon Co. said they didn't owe the government any taxes because they were just buying and selling things, not making any profits.
But the government said, "No no no, you can't just buy and sell things without paying taxes on the money you make in the middle."
It went all the way to the Supreme Court and they decided that Frank Lyon Co. did indeed owe the government taxes because they were making money in the middle, even if they weren't making any direct profits themselves.
So, the lesson here is that even if you're just a middleman buying and selling things, you still have to pay taxes on the money you make in the middle.
The United States government didn't like this and said that Frank Lyon Co. was trying to cheat them out of some taxes. Frank Lyon Co. said they didn't owe the government any taxes because they were just buying and selling things, not making any profits.
But the government said, "No no no, you can't just buy and sell things without paying taxes on the money you make in the middle."
It went all the way to the Supreme Court and they decided that Frank Lyon Co. did indeed owe the government taxes because they were making money in the middle, even if they weren't making any direct profits themselves.
So, the lesson here is that even if you're just a middleman buying and selling things, you still have to pay taxes on the money you make in the middle.