Dorsey v. Commissioner
United States Tax Court
Petitioners were stockholders of APC, which owned the patents for the first workable automatic pinsetting machine for bowling. On Feb. 4, 1947, APC assigned its interests in the invention to AMF for $ 200,000 cash, 25,000 shares of AMF stock, and 1 percent of all receipts by AMF from the sale or lease of the automatic pinsetting machines for a period of 20 years. APC then adopted a plan of partial liquidation.
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Petitioners were stockholders of APC, which owned the patents for the first workable automatic pinsetting machine for bowling. On Feb. 4, 1947, APC assigned its interests in the invention to AMF for $ 200,000 cash, 25,000 shares of AMF stock, and 1 percent of all receipts by AMF from the sale or lease of the automatic pinsetting machines for a period of 20 years. APC then adopted a plan of partial liquidation. On or about Sept. 16, 1954, APC was completely liquidated and its assets distributed in kind to its stockholders. Camden Trust Co. was appointed their agent to receive future payments…
1Opinion of the Court
OPINION
The deficiencies determined in these cases stem from a dispute as to whether amounts received by the petitioners during the years in question should be taxed as long-term capital gains or as ordinary income. The controversy arises from the fact that the petitioners were stockholders of the Pinsetter Co. which liquidated and distributed its assets in kind to them. The distribution was in the form of participating certificates in the right to receive for a period of 20 years from February 4,1947,1 percent of all receipts by AMF from the sale or lease of automatic pinsetting machines.…
2Cases cited26 opinions
- Burnet v. LoganSupreme Court of the United States · 1931
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- Commissioner of Internal Revenue v. CarterCourt of Appeals for the Second Circuit · 1948
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3Cited by8 opinions
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