P & X Mkts. v. Commissioner
United States Tax Court
P, a corporation, filed a lawsuit against various defendants alleging breach of contract, malicious prosecution, intentional interference with business relationship, fraud, and violation of fiduciary and statutory duties. P received $ 850,000 to settle the suit, and it paid $ 198,367 in legal fees in connection therewith. On its Federal income tax return, P included $ 83,608 of the settlement proceeds in its gross income.
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P, a corporation, filed a lawsuit against various defendants alleging breach of contract, malicious prosecution, intentional interference with business relationship, fraud, and violation of fiduciary and statutory duties. P received $ 850,000 to settle the suit, and it paid $ 198,367 in legal fees in connection therewith. On its Federal income tax return, P included $ 83,608 of the settlement proceeds in its gross income. P relied on sec. 104(a)(2), I.R.C., to exclude the remaining proceeds (net of the legal fees) from its gross income. R determined that P's gross income includes the total…
1Opinion of the Court
OPINION
Laro, Judge:
The case is before the Court on respondent’s motion for summary judgment.1 Respondent moves for summary adjudication in her favor, arguing that proceeds received by petitioner in settlement of a lawsuit are not within section 104(a)(2) for lack of a personal injury. Respondent supports her motion with the pleadings and the following exhibits: (1) Petitioner’s 1989 Form 1120, U.S. Corporation Income Tax Return; (2) petitioner’s “first amended complaint for damages” (the complaint), which was filed in the Superior Court of the State of California mainly against three…
2Cases cited14 opinions
- Moline Properties, Inc. v. CommissionerSupreme Court of the United States · 1943
- Sundstrand Corporation v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1994
- Sundstrand Corp. v. CommissionerUnited States Tax Court · 1992
- Associated Press v. United StatesSupreme Court of the United States · 1945
- United States v. BurkeSupreme Court of the United States · 1992
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3Cited by21 opinions
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