Tate v. Knox

DONOVAN, District Judge.

Plaintiff brings this action to recover federal income taxes in the amount of $2,363.03, with interest, paid under protest, for the year 1947. The sole issue is whether a certain payment of money (hereinafter outlined) constitutes payment for the termination of an employment contract, thus subject to taxation as ordinary income, or a capital asset entitled to capital gain or loss treatment upon sale or exchange, under the 1939 Internal Revenue Code. 1

In the interest of clarity a summary of the pertinent facts may be helpful. For the most part the facts are undisputed.…