Gannon v. Commissioner
United States Tax Court
Petitioner Gaius G. Gannon as a partner in the law firm of Baker, Botts, Andrews and Wharton, owned a 6.2 per cent interest in the firm for which he paid $ 10,770.42 and which sum represents the adjusted cost basis of his interest. On December 29, 1944, Gannon withdrew from the firm to practice law as an individual and pursuant to the partnership agreement Gannon's investment reverted to the law firm for which he received no consideration.
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Petitioner Gaius G. Gannon as a partner in the law firm of Baker, Botts, Andrews and Wharton, owned a 6.2 per cent interest in the firm for which he paid $ 10,770.42 and which sum represents the adjusted cost basis of his interest. On December 29, 1944, Gannon withdrew from the firm to practice law as an individual and pursuant to the partnership agreement Gannon's investment reverted to the law firm for which he received no consideration. Held, petitioners sustained a loss of $ 10,770.42 not occasioned by the sale or exchange of a capital asset and this loss is deductible under section 23…
1Opinion of the Court
OPINION.
Black, -Judge:
The issue in these proceedings may be stated as follows: When petitioner Gaius G. Gannon withdrew from a law partnership and pursuant to the partnership agreement his partnership investment was not returned did petitioners sustain a loss within the meaning of either subsection (e) or (g) of section 23 of the Internal Revenue Code ?1
Respondent’s primary contention is that petitioner did not sustain any loss upon his withdrawal from the firm of Baker-Botts. In the alternative, respondent contends that if petitioner did sustain a loss, such loss was a capital loss within…
2Cases cited4 opinions
- Helvering v. William Flaccus Oak Leather Co.Supreme Court of the United States · 1941
- Hale v. HelveringCourt of Appeals for the D.C. Circuit · 1936
- Lehman v. CommissionerUnited States Tax Court · 1946
- Commissioner of Internal Revenue v. LehmanCourt of Appeals for the Second Circuit · 1948
3Cited by7 opinions
- Harold Wener v. Commissioner of Internal Revenue, Molly Wener v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1957
- Citron v. CommissionerUnited States Tax Court · 1991
- Tejon Ranch Co. v. CommissionerUnited States Tax Court · 1985
- National Metropolitan Bank of Washington v. United StatesUnited States Court of Claims · 1953
- Citron v. CommissionerUnited States Tax Court · 1991
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