Kathman v. Commissioner
United States Tax Court
K, a distributor for a food supplement company, had subordinate salesmen who were required to purchase the company's product solely from K. Three of these salesmen paid $ 10,000 each to the company, which in turn forwarded the money to K. Thereupon, K canceled his contract with these salesmen enabling them to purchase the products directly from the company.
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K, a distributor for a food supplement company, had subordinate salesmen who were required to purchase the company's product solely from K. Three of these salesmen paid $ 10,000 each to the company, which in turn forwarded the money to K. Thereupon, K canceled his contract with these salesmen enabling them to purchase the products directly from the company. Held, these transactions do not qualify as a sale or exchange of a capital asset under sec. 1221, I.R.C. 1954, and the gain attributable thereto is taxable as ordinary income.
1Opinion of the Court
Roger J. Kathman and Ethel D. Kathman, Petitioners v. Commissioner of Internal Revenue, Respondent
Kathman v. Commissioner
Docket No. 599-66
United States Tax Court
50 T.C. 125; 1968 U.S. Tax Ct. LEXIS 140;
April 23, 1968, Filed
Decision will be entered for the respondent.
K, a distributor for a food supplement company, had subordinate salesmen who were required to purchase the company's product solely from K. Three of these salesmen paid $ 10,000 each to the company, which in turn forwarded the money to K. Thereupon, K canceled his contract with these salesmen enabling them to purchase the products…
2Cases cited40 opinions
- Burnet v. HarmelSupreme Court of the United States · 1932
- Corn Products Refining Co. v. CommissionerSupreme Court of the United States · 1956
- Commissioner v. P. G. Lake, Inc.Supreme Court of the United States · 1958
- Hort v. CommissionerSupreme Court of the United States · 1941
- Commissioner v. Gillette Motor Transport, Inc.Supreme Court of the United States · 1960
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