Rodeway Inns of America v. Commissioner
United States Tax Court
Rodeway granted to RIS, subject to certain conditions, the exclusive rights to construct or cause to be constructed Rodeway motels in a specified area. Subsequently, Rodeway became convinced that RIS was not performing sufficiently to enable Rodeway to maintain a competitive position within the motel industry.
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Rodeway granted to RIS, subject to certain conditions, the exclusive rights to construct or cause to be constructed Rodeway motels in a specified area. Subsequently, Rodeway became convinced that RIS was not performing sufficiently to enable Rodeway to maintain a competitive position within the motel industry. The agreement was canceled, and as consideration, Rodeway paid RIS $ 100,000. Held, such payment did not constitute a business expense within sec. 162(a), I.R.C. 1954, but was a capital expenditure under sec. 263(a), I.R.C. 1954, and amortizable under sec. 167(a), I.R.C. 1954.
1Opinion of the Court
Rodeway Inns of America, Petitioner v. Commissioner of Internal Revenue, Respondent
Rodeway Inns of America v. Commissioner
Docket No. 8311-72
United States Tax Court
63 T.C. 414; 1974 U.S. Tax Ct. LEXIS 2; 63 T.C. No. 37;
December 24, 1974, Filed
Decision will be entered under Rule 155.
Rodeway granted to RIS, subject to certain conditions, the exclusive rights to construct or cause to be constructed Rodeway motels in a specified area. Subsequently, Rodeway became convinced that RIS was not performing sufficiently to enable Rodeway to maintain a competitive position within the motel industry. The…
2Cases cited31 opinions
- Booth Newspapers, Inc. v. The United States. The Evening News Association v. The United StatesUnited States Court of Claims · 1962
- Manhattan Co. of Virginia, Inc. v. CommissionerUnited States Tax Court · 1968
- Snow v. CommissionerUnited States Tax Court · 1958
- Commissioner of Internal Revenue v. Boylston Market Ass'nCourt of Appeals for the First Circuit · 1942
- Marc D. Leh and L. Waive Leh v. Commissioner of Internal Revenue, David E. Brown and Christobel H. Brown v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1958
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