Eisler v. Commissioner
United States Tax Court
Held: An amount of $ 235,000 paid by T to a former employer in settlement of a lawsuit involving the employer's claim to reacquire certain of its stock from T was intended in addition to settle the employer's claim against T for negligent performance of his duties.
Read the full summary
Held: An amount of $ 235,000 paid by T to a former employer in settlement of a lawsuit involving the employer's claim to reacquire certain of its stock from T was intended in addition to settle the employer's claim against T for negligent performance of his duties. An allocation is made herein whereby (a) $ 100,000 of that payment is held to relate to the stock and to represent a charge against the capital gain which T realized upon sale of the stock and (b) $ 135,000 of that payment is held to relate to the negligence claim and to be deductible as a business loss or expense. Held, further,…
1Opinion of the Court
OPINION
Baum, Judge:
1. The $235,000 settlement payment. — The tax character of a payment in settlement of litigation must be ascertained by reference to the nature of the claim in respect of which the payment is made. Anchor Coupling Co. v. United States, 427 F. 2d 429, 433 (C.A. 7), certiorari denied 401 U.S. 908; Spangler v. Commissioner, 323 F. 2d 913, 916 (C.A. 9), affirming a Memorandum Opinion of this Court; Arthur H. DuGrenier, Inc., 58 T.C. 931; Dudley G. Seay, 58 T.C. 32, 37. acq. 1972-2 C.B. 3. The Commissioner’s position is that petitioner paid SDS $235,000 solely to secure a…
2Cases cited13 opinions
- Commissioner v. CulbertsonSupreme Court of the United States · 1949
- Commissioner v. Glenshaw Glass Co.Supreme Court of the United States · 1955
- United States v. GilmoreSupreme Court of the United States · 1963
- Woodward v. CommissionerSupreme Court of the United States · 1970
- United States v. GeneresSupreme Court of the United States · 1972
8 more not listed; retrieve them via the Exa API.
3Cited by24 opinions
- Stocks v. CommissionerUnited States Tax Court · 1992
- Byrne v. CommissionerUnited States Tax Court · 1988
- Entwicklungs und Finanzierungs A.G. v. CommissionerUnited States Tax Court · 1977
- Longoria v. Comm'rUnited States Tax Court · 2009
- Fitts v. CommissionerUnited States Tax Court · 1994
19 more not listed; retrieve them via the Exa API.