Driggs v. Commissioner
United States Tax Court
Partnership acquired a license to market a computer-assisted translation system in exchange for $ 5.2 million in cash and 10 percent of sales which, during 8 of the years under the license agreement, could be satisfied by means of $ 1 million nonrecourse notes. Ps, limited partners of Partnership, sought to deduct cash payments based upon a $ 13.2 million "principal sum" under sec. 1253(d), I.R.C. 1954, as amended.
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Partnership acquired a license to market a computer-assisted translation system in exchange for $ 5.2 million in cash and 10 percent of sales which, during 8 of the years under the license agreement, could be satisfied by means of $ 1 million nonrecourse notes. Ps, limited partners of Partnership, sought to deduct cash payments based upon a $ 13.2 million "principal sum" under sec. 1253(d), I.R.C. 1954, as amended. R contends that the eight $ 1 million nonrecourse notes should not be recognized for income tax purposes because: (1) They are not contingent payments under sec. 1253(d)(1), I.R.C.…
1Opinion of the Court
GERBER, Judge-.
Respondent determined deficiencies in petitioners’ Federal income taxes as follows:
Petitioners Years Income Tax deficiencies Docket No.
Gary H. and Kay T. Driggs 1978 $57,280.52 12206-82
1979 95,879.69
1980 38,974.16
Douglas H. and Effie K.
Driggs 1978 20,464.43 12206-82
1979 38,566.39
1980 22,155.09
Petitioners Years Income Tax deficiencies Docket No.
John D. and Gail D. Driggs 1978 19,677.97 12206-82
1979 52,654.41
1980 40,448.92
Leo A. and Shirley A. Weidner 1977 1979 6,712.00 21103-82 24,704.55
1980 63,263.00 29718-84 Kathryn A. Mullikin
Howard M. and Virginia Snyder 1980 26,545.68…
2Cases cited16 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Frank Lyon Co. v. United StatesSupreme Court of the United States · 1978
- Crane v. CommissionerSupreme Court of the United States · 1947
- Estate of Charles T. Franklin, Deceased v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1976
- Commissioner v. TuftsSupreme Court of the United States · 1983
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