Aitkin v. Commissioner
United States Board of Tax Appeals
The amount paid by two partners to a third partner, in excess of such partner's interest in the capital and undivided proflt in the partnership, to secure his withdrawal from the partnership, such partner taking with him that portion of the business of the partnership which he had secured and the payment resulting in the acquisition of no capital asset by those making the payment, held to be deductible in computing net taxable income.
1Opinion of the Court
*694OPINION.
Phillips:
The Commissioner has conceded that the petitioners acquired no physical assets from Dippy upon his retirement from the firm of Dippy and Aitkin. He contends, however, that they acquired something intangible in return for the payment of $5,000, and that, therefore, such payment did not represent a business expense.
Petitioners have shown that the nature of their advertising business was such that each member of the firm had his own clients who gave their business to the firm in reliance upon the integrity, ability and genius of the particular member with whom they dealt.. The…
2Cases cited1 opinion
- Childers v. McClaughrySupreme Court of the United States · 1910
3Cited by4 opinions
- McGee v. NeeCourt of Appeals for the Eighth Circuit · 1940
- Aitkin v. CommissionerUnited States Board of Tax Appeals · 1928
- Fairmont Homes, Inc. v. CommissionerUnited States Tax Court · 1983
- Williams & Waddell, Inc. v. PittsDistrict Court, E.D. South Carolina · 1957