Smith v. Commissioner
United States Tax Court
Petitioners and others contracted to sell all the stock of a gambling casino for $ 10 million, the initial payment of $ 500,000 to be deposited in escrow and to be paid the sellers as liquidated damages for breach of contract if the buyer did not consummate the purchase. The buyer defaulted and sued to recover the deposit. The State court gave judgment for the sellers for the deposited amount.
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Petitioners and others contracted to sell all the stock of a gambling casino for $ 10 million, the initial payment of $ 500,000 to be deposited in escrow and to be paid the sellers as liquidated damages for breach of contract if the buyer did not consummate the purchase. The buyer defaulted and sued to recover the deposit. The State court gave judgment for the sellers for the deposited amount. Pending appeal, the parties agreed upon a settlement whereby a part of the fund was returned to the buyer and a part distributed among the sellers. Held, the amounts received by the petitioners under…
1Opinion of the Court
Bruce, Judge:
Respondent determined deficiencies in income tax for the calendar year 1957 as follows:
Docket No. Petitioner Deficiency
5673-64 Harold S. Smith and Lois M. Smith_ $32, 131. 00
5926-64 Raymond A. Smith and Olga Smith_ 30, 782. 37
The sole issue for decision is whether certain amounts received by Harold S. Smith and Raymond A. Smith in 1957 are taxable as capital gains or as ordinary income.
FINDINGS OF FACT
The stipulations of facts and exhibits attached thereto are incorporated herein by this reference.
Harold S. Smith and Lois M. Smith were hudband and wife during 1957 and resided in…
2Cases cited18 opinions
- Commissioner v. Estate of BoschSupreme Court of the United States · 1967
- Sun Printing and Publishing Assn. v. MooreSupreme Court of the United States · 1902
- Priebe & Sons, Inc. v. United StatesSupreme Court of the United States · 1947
- United States v. Bethlehem Steel Co.Supreme Court of the United States · 1907
- Raytheon Production Corp. v. Commissioner of Int. Rev.Court of Appeals for the First Circuit · 1944
13 more not listed; retrieve them via the Exa API.
3Cited by14 opinions
- Philip Handelman and Esther Handelman v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1975
- Mittleman v. CommissionerUnited States Tax Court · 1971
- United States Freight Company and Subsidiaries v. The United StatesUnited States Court of Claims · 1970
- Graphic Press, Inc. v. CommissionerUnited States Tax Court · 1973
- Harold S. Smith and Lois M. Smith, Raymond A. Smith and Olga Smith v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1969
9 more not listed; retrieve them via the Exa API.