Slater v. Commissioner
United States Tax Court
In order to be released from a covenant not to compete, the petitioner transferred to his former employer certain rights in stock that he had acquired from such employer at a bargain price. At the time of the transfer, the value of the stock had declined greatly and was substantially less than the petitioner's basis in the stock. It was subsequently sold at a loss by a bank to satisfy a debt the petitioner owed the bank.
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In order to be released from a covenant not to compete, the petitioner transferred to his former employer certain rights in stock that he had acquired from such employer at a bargain price. At the time of the transfer, the value of the stock had declined greatly and was substantially less than the petitioner's basis in the stock. It was subsequently sold at a loss by a bank to satisfy a debt the petitioner owed the bank. Held, the loss was not an expense of seeking new employment. Sec. 162(a), I.R.C. 1954. Held, further, the sale was not integrally related to the bargain purchase of the…
1Opinion of the Court
Simpson, Judge:
The Commissioner determined the following deficiencies in the petitioners’ Federal income taxes:
Year Deficiency
1967_ $5,442
1968_ 338
1969_ 354
1970_ 6,260
It must be decided whether the transfer of certain rights in stock to secure employment and the subsequent loss on the sale of the stock gave rise to a trade or business expense within the meaning of section 162(a) of the Internal Revenue Code of 1954. In the alternative, we must decide whether Arrowsmith v. Commissioner, 344 U.S. 6 (1952), applies to the acquisition of the stock and its subsequent sale at a loss, or whether,…
2Cases cited5 opinions
- Primuth v. CommissionerUnited States Tax Court · 1970
- Arrowsmith v. CommissionerSupreme Court of the United States · 1952
- Cremona v. CommissionerUnited States Tax Court · 1972
- George T. And Ruth A. Kimbell v. United States of America, No. 73-3411 Summary Calendar. Rule 18, 5th Cir. See Isbell Enterprises, Inc. v. Citizens Casualty Co. Of New York, 5th Cir. 1970, 431 F.2d 409, Part ICourt of Appeals for the Fifth Circuit · 1974
- Turco v. CommissionerUnited States Tax Court · 1969
3Cited by1 opinion
- Slater v. CommissionerUnited States Tax Court · 1975