Schmitz v. Commissioner
United States Tax Court
Two dental surgeons working as partners had established and developed profitable practices at San Francisco and at San Rafael. The practice at San Rafael was more profitable and when the partnership was dissolved the doctor taking that practice paid $ 36,000 to the doctor taking the San Francisco practice, all of which was assigned to a covenant not to compete by their agreement.
Read the full summary
Two dental surgeons working as partners had established and developed profitable practices at San Francisco and at San Rafael. The practice at San Rafael was more profitable and when the partnership was dissolved the doctor taking that practice paid $ 36,000 to the doctor taking the San Francisco practice, all of which was assigned to a covenant not to compete by their agreement. Held: The record demonstrates by strong proof that the assignment of consideration to the covenant by the agreement did not have any "independent basis in fact or * * * arguable relationship with business reality…
1Opinion of the Court
ForRester, Judge:
In these consolidated cases, respondent has determined deficiencies in petitioners’ income taxes for the calendar year 1963 as follows:
Docket No. Petitioners Deficiencies
1881-67- _J. Leonard Schmitz and Alice Schmitz_$5, 615. 60
1967-67_Albert H. Throndson and Doris G. Throndson_ 11, 740. 96
In docket No. 1967-67 a casualty loss adjustment, set forth in the statutory notice of deficiency, has been disposed of by agreement of the parties, consequently the sole remaining issue left for decision is whether the payment of $36,000 by J. Leonard Schmitz to Albert H. Throndson was for…
2Cases cited39 opinions
- Gregory v. HelveringSupreme Court of the United States · 1935
- Lucas v. EarlSupreme Court of the United States · 1930
- Commissioner v. Court Holding Co.Supreme Court of the United States · 1945
- Higgins v. SmithSupreme Court of the United States · 1940
- Knetsch v. United StatesSupreme Court of the United States · 1960
34 more not listed; retrieve them via the Exa API.
3Cited by117 opinions
- Buffalo Tool & Die Mfg. Co. v. CommissionerUnited States Tax Court · 1980
- Pritchett v. CommissionerUnited States Tax Court · 1974
- Albert H. And Doris G. Throndson v. Commissioner of Internal Revenue, Albert H. And Doris G. Throndson v. Commissioner of Internal Revenue, J. Leonard Schmitz and Alice Schmitz v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1972
- Seay v. CommissionerUnited States Tax Court · 1972
- Finoli v. CommissionerUnited States Tax Court · 1986
112 more not listed; retrieve them via the Exa API.