Cooney v. Commissioner
United States Tax Court
In 1966, petitioners were partners in a law firm with nine members. Effective Dec. 31, 1966, three members withdrew from the firm. They each received a promissory note and were relieved of their proportionate share of the indebtedness of the partnership. During 1967, the continuing partnership paid the notes and the assumed indebtedness.
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In 1966, petitioners were partners in a law firm with nine members. Effective Dec. 31, 1966, three members withdrew from the firm. They each received a promissory note and were relieved of their proportionate share of the indebtedness of the partnership. During 1967, the continuing partnership paid the notes and the assumed indebtedness. Held: The transaction whereby the partners withdrew from the partnership was a liquidation of their interests under sec. 736, I.R.C. 1954, rather than a sale under sec. 741, I.R.C. 1954. The payments made to and on behalf of the withdrawing partners are…
1Opinion of the Court
OPINION
The issue presented for decision requires a determination of the tax consequences to the continuing members of petitioners’ law firm of the payments to the withdrawing partners. Those payments took the form of cash and the discharge of the withdrawing partners’ shares of certain partnership liabilities. Four of the continuing partners, petitioners in the instant proceeding, contend that, under section 736(a), those payments were made in liquidation of the withdrawing partners’ , interests in the partnership and that, consequently, such payments are deductible in computing the…
2Cases cited8 opinions
- Foxman v. CommissionerUnited States Tax Court · 1964
- Karan v. CommissionerCourt of Appeals for the Seventh Circuit · 1963
- Smith v. CommissionerUnited States Tax Court · 1962
- V. Zay Smith, and Ida Smith v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1963
- Swygert Bros. v. Bank of HaralsonCourt of Appeals of Georgia · 1913
3 more not listed; retrieve them via the Exa API.
3Cited by9 opinions
- Spector v. CommissionerUnited States Tax Court · 1979
- Estate of Bette v. CommissionerUnited States Tax Court · 1977
- Cooney v. CommissionerUnited States Tax Court · 1975
- Esler v. CommissionerUnited States Tax Court · 1988
- Estate of Cartwright v. CommissionerUnited States Tax Court · 1996
4 more not listed; retrieve them via the Exa API.