G C Services Corp. v. Commissioner
United States Tax Court
P purchased shares of its own stock from a shareholder, who at the time had several legal actions pending against P. As part of the transaction, the seller also released the legal actions. The written agreement between the parties primarily dealt with the sale of the stock and allocated the entire payment to the purchase of the stock, but the agreement did also provide for the release of the legal actions.
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P purchased shares of its own stock from a shareholder, who at the time had several legal actions pending against P. As part of the transaction, the seller also released the legal actions. The written agreement between the parties primarily dealt with the sale of the stock and allocated the entire payment to the purchase of the stock, but the agreement did also provide for the release of the legal actions. Held, P failed to carry its burden of showing by "strong proof" that the written agreement did not reflect the intentions of the parties.
1Opinion of the Court
Simpson, Judge:
The Commissioner determined a deficiency of $168,000 in the petitioner’s Federal income tax for 1972. The petitioner subsequently claimed an overpayment of $93,848 for the same year. The issues for decision are: (1) What portion, if any, of the payment which the petitioner made to purchase shares of its own stock and to settle claims of the seller of such stock is allocable to the settlement of such claims, and (2) if a portion is so allocable, whether it can be deducted as an ordinary and necessary business expense under section 162(a) of the Internal Revenue Code of 1954.
FINDI…
2Cases cited8 opinions
- Commissioner v. DanielsonCourt of Appeals for the Third Circuit · 1967
- Danielson v. CommissionerUnited States Tax Court · 1965
- Annabelle Candy Co. v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1962
- Charles W. Balthrope and Mary v. Balthrope v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1966
- Lucas v. CommissionerUnited States Tax Court · 1972
3 more not listed; retrieve them via the Exa API.
3Cited by25 opinions
- Thomas v. CommissionerUnited States Tax Court · 1985
- Major v. CommissionerUnited States Tax Court · 1981
- Elrod v. CommissionerUnited States Tax Court · 1986
- Meredith Corp. v. CommissionerUnited States Tax Court · 1994
- Anderson v. Comm'rUnited States Tax Court · 1989
20 more not listed; retrieve them via the Exa API.