Watson v. Commissioner
United States Tax Court
Petitioner, a certified public accountant, entered into a contract providing for the sale of his accounting practice to two men with whom he then formed a partnership for the practice of accountancy.
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Petitioner, a certified public accountant, entered into a contract providing for the sale of his accounting practice to two men with whom he then formed a partnership for the practice of accountancy. The contract provided for a present payment to petitioner and a present allocation of a 45 per cent interest in the partnership to the two men and a future determinable payment at the end of a 10-year period when the petitioner would transfer to them his 55 per cent interest in the partnership. The division of the net profits and losses of the partnership was separately provided for and was in…
1Opinion of the Court
Train, Judge:
Respondent determined a deficiency of $412.36 in the petitioners’ income tax for the calendar year 1956. The question presented is whether gain realized upon the receipt of a payment made under a contract providing for the sale of a public accounting practice is capital gain or ordinary income.
FINDINGS OF FACT.
Some of the facts are stipulated and are hereby found as stipulated.
Petitioners are individuals, husband and wife, residing in Asheboro, North Carolina. They filed a joint return prepared on the cash basis in accordance with, their method of accounting for the calendar year…
2Cases cited5 opinions
- United States v. DavisSupreme Court of the United States · 1962
- In Re the Accounting of BrownNew York Court of Appeals · 1926
- Horton v. CommissionerUnited States Tax Court · 1949
- O'Rear v. CommissionerUnited States Board of Tax Appeals · 1933
- O'Rear v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1935
3Cited by37 opinions
- Schmitz v. CommissionerUnited States Tax Court · 1968
- Hancock Academy of Savannah, Inc. v. CommissionerUnited States Tax Court · 1977
- Vadnais Lumber Supply, Inc. v. Byrne (In Re Vadnais Lumber Supply, Inc.)United States Bankruptcy Court, D. Massachusetts · 1989
- Lucas v. CommissionerUnited States Tax Court · 1972
- Brooks v. CommissionerUnited States Tax Court · 1961
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