Cooper v. Comm'r
United States Tax Court
In 1997 P-H, an inventor, transferred several patents to T, a corporation. Ps own 24% of the outstanding stock of T. P-W's sister and Ps' friend own the remaining stock. P-H controlled T through its officers, directors, and shareholders. Ps reported royalty income that P-H received from T in exchange for the transfer of the patents as capital gain under I.R.C. sec. 1235(a) for 2006, 2007, and 2008. In 2006 P-H paid the engineering expenses of a related corporation.
Read the full summary
In 1997 P-H, an inventor, transferred several patents to T, a corporation. Ps own 24% of the outstanding stock of T. P-W's sister and Ps' friend own the remaining stock. P-H controlled T through its officers, directors, and shareholders. Ps reported royalty income that P-H received from T in exchange for the transfer of the patents as capital gain under I.R.C. sec. 1235(a) for 2006, 2007, and 2008. In 2006 P-H paid the engineering expenses of a related corporation. Ps deducted these expenses as professional fees on a Schedule C, Profit or Loss From Business, attached to their 2006 Federal…
1Opinion of the Court
Marvel, Judge:
Respondent determined deficiencies in petitioners’ Federal income tax of $580,961, $384,705, and $496,236 for 2006, 2007, and 2008, respectively, and accuracy-related penalties under section 6662(a)1 of $116,192, $76,941, and $99,247 for 2006, 2007, and 2008, respectively. After concessions,2 the issues for decision are: (1) whether royalties petitioner James Cooper received during 2006, 2007, and 2008 qualified for capital gain treatment pursuant to section 1235; (2) whether petitioners may deduct professional fees paid during 2006 that were attributable to expenses charged by…
2Cases cited42 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Deputy, Administratrix v. Du PontSupreme Court of the United States · 1940
- Freytag v. CommissionerSupreme Court of the United States · 1991
- HIGBEE v. COMMISSIONER OF INTERNAL REVENUEUnited States Tax Court · 2001
- Indopco, Inc. v. CommissionerSupreme Court of the United States · 1992
37 more not listed; retrieve them via the Exa API.
3Cited by3 opinions
- Graev v. Comm'rUnited States Tax Court · 2016
- Cooper v. Comm'rUnited States Tax Court · 2014
- James C. Cooper & Lorelei M. Cooper v. CommissionerUnited States Tax Court · 2014