SWANK & SON, INC., Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant

SWANK & SON, INC., Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant. No. 74-1131. United States Court of Appeals, Ninth Circuit. Aug. 11, 1975. Leonard J. Henzke, Jr., Atty. (argued), Tax Div., U. S. Dept, of Justice, Washington, D. C., for defendant-appellant. Richard F. Gallagher (argued), Great Falls, Mont., for plaintiff-appellee. The Honorable Thomas F. Murphy, Senior United States District Judge for the Southern District of New York, sitting by designation. [MAJORITY — PER CURIAM:] OPINION Before KOELSCH and DUNIWAY, Circuit Judges, and MURPHY, District Judge. PER CURIAM: The question on this appeal is whether the District Judge erred in concluding that the cash bonus received by Taxpayer, a small business corporation under Subchapter S of the Internal Revenue Code of 1954 (26 U.S.C. § 1371 et seq.) and the lessor in an oil and gas lease, did not constitute “personal holding company income” under 26 U.S.C. § 1372(e)(5) as it read in 1965, and hence did not operate to terminate Taxpayer’s election to be taxed as a small business corporation. Having carefully considered the matter, we are convinced that the answer is “no” and approve and adopt the well-considered opinion of Judge Smith appearing in 362 F.Supp. 897 (D.Mont. 1973). Affirmed.