Entwicklungs und Finanzierungs A.G. v. Commissioner
United States Tax Court
Petitioner settled two lawsuits filed against it by agreeing to pay Cleanamation a total of $ 450,000. As part of the settlement, petitioner acquired Cleanamation's inventory of laundry and drycleaning equipment and parts, its intangible operating capital assets, and certain tangible capital assets alleged in one of the lawsuits to have been unlawfully converted by petitioner.
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Petitioner settled two lawsuits filed against it by agreeing to pay Cleanamation a total of $ 450,000. As part of the settlement, petitioner acquired Cleanamation's inventory of laundry and drycleaning equipment and parts, its intangible operating capital assets, and certain tangible capital assets alleged in one of the lawsuits to have been unlawfully converted by petitioner. On its 1970 Federal income tax return, petitioner claimed a $ 300,000 ordinary and necessary business expense deduction on account of the settlement, which deduction was disallowed by respondent. Held: $ 300,000 of the…
1Opinion of the Court
Bruce, Judge:
Respondent determined deficiencies of $11,757.56 and $72,881.30 in petitioner’s Federal income tax for 1970 and 1971, respectively. Respondent has conceded the deficiency for 1971 and two of the adjustments made with respect to 1970 in the statutory notice of deficiencies. Two other adjustments made with respect to 1970 in the statutory notice were not placed in issue by petitioner. Consequently, the sole issue presented for decision is whether a $300,000 liability incurred by petitioner in 1970 as the result of a lawsuit settlement was an ordinary and necessary business expense…
2Cases cited20 opinions
- Commissioner v. Gooch Milling & Elevator Co.Supreme Court of the United States · 1944
- Newark Morning Ledger Company, a Corporation of the State of New Jersey v. The United States of AmericaCourt of Appeals for the Third Circuit · 1976
- LTV Corp. v. CommissionerUnited States Tax Court · 1975
- Boagni v. CommissionerUnited States Tax Court · 1973
- Anchor Coupling Company, Inc. v. United StatesCourt of Appeals for the Seventh Circuit · 1970
15 more not listed; retrieve them via the Exa API.
3Cited by15 opinions
- Fort Howard Corp. v. CommissionerUnited States Tax Court · 1994
- Kramer v. Comm'rUnited States Tax Court · 1983
- Green v. CommissionerUnited States Tax Court · 1987
- Scallen v. CommissionerUnited States Tax Court · 1987
- Thomas W. Dower v. United StatesCourt of Appeals for the Seventh Circuit · 1981
10 more not listed; retrieve them via the Exa API.