Old Town Corp. v. Commissioner
United States Tax Court
McGraw, contemplating the purchase of the controlling shares in petitioner, negotiated with Roberts for the possible future employment of Roberts by petitioner. After the stock purchase was consummated, Roberts was employed by petitioner but was discharged a shorttime thereafter. Roberts commenced a lawsuit containing one cause of action against petitioner for breach of contract and three causes of action against McGraw for fraud and breach of contract.
Read the full summary
McGraw, contemplating the purchase of the controlling shares in petitioner, negotiated with Roberts for the possible future employment of Roberts by petitioner. After the stock purchase was consummated, Roberts was employed by petitioner but was discharged a shorttime thereafter. Roberts commenced a lawsuit containing one cause of action against petitioner for breach of contract and three causes of action against McGraw for fraud and breach of contract. McGraw notified petitioner that he would seek reimbursement from petitioner in the event he was held liable to Roberts. Petitioner's…
1Opinion of the Court
FisheR, Judge:
Respondent determined a deficiency in petitioner’s income tax for the year 1953 in the amount of $52,000. The greater portion of the deficiency, and the only part here in issue, results from respondent’s disallowance of $100,000 of a $117,128.78 business expense deduction in 1955, thereby decreasing the net operating loss for 1955 which could be carried back to 1953. The sole issue for our deter-initiation is whether the compromise settlement and legal fees paid or accrued by petitioner in 1955 in connection with a lawsuit against one of its employees are ordinary and necessary…
2Cases cited11 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Deputy, Administratrix v. Du PontSupreme Court of the United States · 1940
- Commissioner v. HeiningerSupreme Court of the United States · 1943
- Old Colony Railroad v. CommissionerSupreme Court of the United States · 1932
- Lilly v. CommissionerSupreme Court of the United States · 1952
6 more not listed; retrieve them via the Exa API.
3Cited by22 opinions
- J.R. Betson, Jr. And Joan Sue Betson v. Commissioner of Internal Revenue ServiceCourt of Appeals for the Ninth Circuit · 1986
- Pike v. CommissionerUnited States Tax Court · 1965
- Anderson v. CommissionerUnited States Tax Court · 1971
- Mitchell v. CommissionerUnited States Tax Court · 1969
- Eisler v. CommissionerUnited States Tax Court · 1973
17 more not listed; retrieve them via the Exa API.