Reyes v. Commissioner of Internal Revenue

Summary

This landmark taxation case established that co-owners of income-producing property can be classified as a partnership for tax purposes under the National Internal Revenue Code, even without formal partnership registration. Father and son petitioners who jointly purchased and managed a rental building, dividing profits equally, were held to constitute a partnership subject to corporate income tax. The Supreme Court affirmed that the essential elements of partnership - contribution to common fund and intent to divide profits - were present, making the Evangelista precedent applicable. The decision clarified that under the tax code, 'corporation' includes partnerships regardless of how created, except for duly registered general co-partnerships. This case significantly impacted how joint property ownership arrangements are taxed in the Philippines.