McCullough Tool Co. v. Commissioner
United States Tax Court
In 1944 and 1947, petitioner became the exclusive licensee under certain patents by agreements, terminable without default only by petitioner upon written notice, and providing for royalty payments computed upon gross receipts. In 1950, petitioner and its licensors executed modification agreements which provided for the unconditional sale of the patents for agreed prices, the payment of which was to be made in installments.
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In 1944 and 1947, petitioner became the exclusive licensee under certain patents by agreements, terminable without default only by petitioner upon written notice, and providing for royalty payments computed upon gross receipts. In 1950, petitioner and its licensors executed modification agreements which provided for the unconditional sale of the patents for agreed prices, the payment of which was to be made in installments. Held, by the execution of the modification agreements, petitioner acquired fixed costs for the patents, susceptible of depreciation. Held, further, the installment…
1Opinion of the Court
OPINION.
Black, Judge:
The first issue here presented is whether, as petitioner contends, sums paid in 1951 and 1952 by petitioner under the jet patent and bullet patent agreements of 1947 and 1944, respectively, as modified by the 1950 agreements, were paid to acquire depreciable capital assets of a fixed cost and, therefore, whether petitioner is entitled to deduct depreciation on the patents under section 23 (1) (1) 1 of the 1939 Code;2 or whether, as respondent has determined, the agreements as modified failed to accomplish a fixed price for the patents. Respondent has disallowed…
2Cases cited3 opinions
- Myers v. Comm'rUnited States Tax Court · 1946
- Journal Publishing Co. v. CommissionerUnited States Tax Court · 1944
- C. W. Titus, Inc. v. CommissionerUnited States Board of Tax Appeals · 1936
3Cited by7 opinions
- Simmonds Precision Prods. v. Comm'rUnited States Tax Court · 1980
- Newton Insert Co. v. CommissionerUnited States Tax Court · 1974
- McCullough Tool Co. v. CommissionerUnited States Tax Court · 1960
- McCullough v. Comm'rUnited States Tax Court · 1962
- NATIONAL UTIL. PRODS. CO. v. COMMISSIONERUnited States Tax Court · 1978
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