McDermott v. Commissioner

OPINION

The primary issue is whether the amounts received by Julian from the corporation in 1955 constituted ordinary income or capital gains. The determination of this issue depends upon whether the series of so-called agreements, modifications, and waivers, executed by Julian in his individual capacity and by Mildred for the corporation in 1943 and 1944 amounted to a transfer to the corporation of all substantial rights to the patents which Julian owned at the time or subsequently developed.

At the outset it should be pointed out that section 1235 of the Internal Revenue Code of 19541 is not…