McArdle v. Commissioner
United States Tax Court
Income -- Cash Basis -- Receipt -- Year of -- Purchase Price Withheld. -- That part of the profit from the sale of stock represented by a portion of the purchase price which was, in accordance with the contract of sale, returned to the buyer at the time of the sale in order to guarantee him against loss from accounts receivable and contingent liabilities of the corporation the stock of which was being purchased, was not income to the seller on cash basis in the year of sale,…
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Income -- Cash Basis -- Receipt -- Year of -- Purchase Price Withheld. -- That part of the profit from the sale of stock represented by a portion of the purchase price which was, in accordance with the contract of sale, returned to the buyer at the time of the sale in order to guarantee him against loss from accounts receivable and contingent liabilities of the corporation the stock of which was being purchased, was not income to the seller on cash basis in the year of sale, but only in the following year when received by him unconditionally.
1Opinion of the Court
OPINION.
Muedock, Judge-.
The parties are not in dispute as to any of the figures. The petitioners point to the terms of the contract under which they were required to return to the purchaser $25,381.14 of their share of the agreed purchase price to guarantee the purchaser against loss on accounts receivable and contingent liabilities. They argue that they did not actually receive that money for income tax purposes in 1942, since it was never theirs to do with as they pleased during that year, but was, for all practical purposes, withheld by the purchaser, and in fact was never actually paid in…
2Cited by13 opinions
- Stiles v. CommissionerUnited States Tax Court · 1978
- Hall v. CommissionerUnited States Tax Court · 1950
- Carpenter v. CommissionerUnited States Tax Court · 1960
- Estate of Bette v. CommissionerUnited States Tax Court · 1977
- Allen v. CommissionerUnited States Tax Court · 1975
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