Fahey v. Commissioner
United States Tax Court
Petitioner Pat N. Fahey is a member of a law firm in Houston, Texas. When he joined the firm in 1942, it had been employed to conduct certain litigation on a contingent fee basis. An attorney in Louisiana was also employed in the case and he was to receive as his fee the other one-half of the contingent fee. Petitioner, when he joined the firm, had it understood that he would take no part in the litigation and would receive no part of the fee.
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Petitioner Pat N. Fahey is a member of a law firm in Houston, Texas. When he joined the firm in 1942, it had been employed to conduct certain litigation on a contingent fee basis. An attorney in Louisiana was also employed in the case and he was to receive as his fee the other one-half of the contingent fee. Petitioner, when he joined the firm, had it understood that he would take no part in the litigation and would receive no part of the fee. In December 1942, the Louisiana lawyer became ill and was short of funds and assigned one-half of his interest in the fee for a cash consideration to…
1Opinion of the Court
OPINION.
Black, Judge:
We have but one issue in this proceeding and that is whether the net amount which petitioner received by virtue of his purchasing a one-third interest in one-half of James R. Parkerson’s interest in a contingent fee contracted for in the litigation of Barbour v. Barbour pending in the United States District Court for the Southern District of Texas was all taxable as ordinary income, as the Commissioner has determined, or was taxable as capital gain and only 50' per cent thereof to be taken into income, as petitioners have treated it in their income tax return and still…
2Cases cited1 opinion
- Fairbanks v. United StatesSupreme Court of the United States · 1939
3Cited by18 opinions
- Towers v. CommissionerUnited States Tax Court · 1955
- Ernest L. Wilkinson and Alice L. Wilkinson v. The United StatesUnited States Court of Claims · 1962
- Nahey v. CommissionerUnited States Tax Court · 1998
- Hudson v. CommissionerUnited States Tax Court · 1953
- Sherwood v. CommissionerUnited States Tax Court · 1953
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