King Broadcasting Co. v. Commissioner
United States Tax Court
Held, the cancellation by petitioner of a franchise which it owned did not constitute a "sale or exchange" within the meaning of secs. 1221 or 1231, I.R.C. 1954, because petitioner did not receive any consideration for either the cancellation or assignment of said franchise.
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Held, the cancellation by petitioner of a franchise which it owned did not constitute a "sale or exchange" within the meaning of secs. 1221 or 1231, I.R.C. 1954, because petitioner did not receive any consideration for either the cancellation or assignment of said franchise. Held, further, Muzak Program Service Agreements which were sold by petitioner did not constitute "capital assets" within the meaning of sec. 1221 but were mere contractual arrangements to obtain future ordinary income by reason of transmitting recorded programs pursuant to the said agreements.
1Opinion of the Court
OPINION
Fay, Judge:
Respondent determined a deficiency in petitioner’s income tax for the calendar year 1962 in the amount of $69,336.67.
Certain issues raised in the pleadings have been disposed of by agreement of the parties prior to the trial herein. The sole issue left for decision is whether $67,800 realized by petitioner upon the assignment of Muzak subscribed contracts which were separately bargained for on the sale and assignment of assets to two separate purchasers is taxable as capital gains under section 1221 of the Internal Revenue Code of 1954 or ordinary income under section 61 of…
2Cases cited21 opinions
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- Hort v. CommissionerSupreme Court of the United States · 1941
- Commissioner of Internal Revenue v. José FerrerCourt of Appeals for the Second Circuit · 1962
- Commissioner of Internal Revenue v. Golonsky. Commissioner of Internal Revenue v. GoldCourt of Appeals for the Third Circuit · 1952
- Commissioner of Internal Revenue v. Starr Bros., IncCourt of Appeals for the Second Circuit · 1953
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