Graham v. Commissioner
United States Tax Court
Income Tax -- Sale of Patent -- Long-Term Capital Gain. -- The petitioner and another individual, as co-owners of a patent, entered into a contract which by its terms transferred all their right, title, and interest in the patent to a corporation the majority of the stock of which was owned by them, there being, however, a substantial minority interest in the corporation.
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Income Tax -- Sale of Patent -- Long-Term Capital Gain. -- The petitioner and another individual, as co-owners of a patent, entered into a contract which by its terms transferred all their right, title, and interest in the patent to a corporation the majority of the stock of which was owned by them, there being, however, a substantial minority interest in the corporation. Held, that the transaction was at arm's length and effective as an assignment of the patent, and that the amounts received by the petitioner under the contract constituted long-term capital gain under section 117 of the…
1Opinion of the Court
OPINION.
Atkins, Judge:
The sole question presented is whether the amount of $48,643.73 received by the petitioner in the year 1951 from the corporation pursuant to the provisions of the contract of January 1, 1949, constitutes long-term capital gain, only one-half of which is to be taken into account in computing net income under the provisions of section 117 of the Internal Eevenue Code of 1939.1
The respondent treated the full amount as ordinary income. Apparently he does not contend that the petitioner’s interest in the patent in question was not a capital asset or that it was not held for…
2Cases cited15 opinions
- Waterman v. MacKenzieSupreme Court of the United States · 1891
- Myers v. Comm'rUnited States Tax Court · 1946
- Commissioner of Internal Revenue v. HopkinsonCourt of Appeals for the Second Circuit · 1942
- Allen, Collector of Internal Revenue v. WernerCourt of Appeals for the Fifth Circuit · 1951
- Orla E. Watson and Edith Watson v. United StatesCourt of Appeals for the Tenth Circuit · 1955
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3Cited by2 opinions
- Eickmeyer v. United StatesUnited States Court of Claims · 1986
- Graham v. CommissionerUnited States Tax Court · 1956