Porreca v. Commissioner
United States Tax Court
Petitioner Joseph Porreca purchased all rights to the distribution and sale of six episodes of two television programs. The promissory notes petitioner signed in connection with the purchase were labeled "recourse" promissory notes and purported to make petitioner personally liable thereon. During the initial 5-year term of the promissory notes, however, only nominal payments with respect thereto were required.
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Petitioner Joseph Porreca purchased all rights to the distribution and sale of six episodes of two television programs. The promissory notes petitioner signed in connection with the purchase were labeled "recourse" promissory notes and purported to make petitioner personally liable thereon. During the initial 5-year term of the promissory notes, however, only nominal payments with respect thereto were required. At the end of the initial 5-year term and by the payment of $ 1,000 per note, the promissory notes could be converted by petitioner to nonrecourse liabilities. Held: Although the…
1Opinion of the Court
SWIFT, Judge-.
In a statutory notice dated March 9, 1983, respondent determined deficiencies in petitioners’ Federal income tax liabilities as follows:
Year Amount
1979 . $61,617.33
1980 . 115,490.00
1981 . 30,738.82
The primary issues for decision are: (1) Whether petitioner Joseph Porreca was at risk within the meaning of section 4651 for the principal amount of promissory notes that were labeled “recourse” liabilities and whether the conversion feature of the promissory notes so immunized petitioner from economic risk with respect thereto that there existed an “other similar arrangement” within…
2Cases cited13 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Crane v. CommissionerSupreme Court of the United States · 1947
- Dreicer v. CommissionerUnited States Tax Court · 1982
- Jasionowski v. CommissionerUnited States Tax Court · 1976
- Allen v. CommissionerUnited States Tax Court · 1979
8 more not listed; retrieve them via the Exa API.
3Cited by55 opinions
- Waddell v. CommissionerUnited States Tax Court · 1986
- Levy v. CommissionerUnited States Tax Court · 1988
- Larsen v. CommissionerUnited States Tax Court · 1987
- Laureys v. CommissionerUnited States Tax Court · 1989
- Melvin v. CommissionerUnited States Tax Court · 1987
50 more not listed; retrieve them via the Exa API.