Gazette Tel. Co. v. Commissioner
United States Tax Court
1. Depreciation. -- Cost of covenant not to compete held depreciable over the term of the covenant. 2. Deductions -- Interest. -- Notes issued by petitioner to shareholders held to be an indebtedness and interest payments thereon deductible. 3. Additional Surtax -- Section 102, I. R. C. -- Held that petitioner was not formed or availed of for purpose of preventing imposition of surtax on shareholders; held, further, petitioner's earnings were not permitted to accumulate…
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1. Depreciation. -- Cost of covenant not to compete held depreciable over the term of the covenant. 2. Deductions -- Interest. -- Notes issued by petitioner to shareholders held to be an indebtedness and interest payments thereon deductible. 3. Additional Surtax -- Section 102, I. R. C. -- Held that petitioner was not formed or availed of for purpose of preventing imposition of surtax on shareholders; held, further, petitioner's earnings were not permitted to accumulate beyond the reasonable needs of the business in years subject to review.
1Opinion of the Court
FINDINGS OF FACT AND OPINION.
Tietjens, Judge:
Petitioner contests a determination of deficiencies in income tax and surtax under section 102 of the Internal Revenue Code for the fiscal years ended March 31, 1947 and 1948, as follows:
Year Income taw deficiency Deficiency under sec. 102,1. B. O.
1947_$18,709.15 $30,714.82
1948_._ 18,127.65 44,982.73
Several issues raised by the pleadings have been abandoned by petitioner. The following questions remain for decision:
Issue No. 1. Did petitioner properly deduct amounts representing amortization of the cost of a covenant not to compete?
Issue No. 2. Did…
2Cases cited5 opinions
- Michaels v. CommissionerUnited States Tax Court · 1949
- Horton v. CommissionerUnited States Tax Court · 1949
- Toledo Newspaper Co. v. CommissionerUnited States Tax Court · 1943
- Crawford County Printing & Pub. Co. v. CommissionerUnited States Tax Court · 1952
- World Pub. Co. v. United StatesDistrict Court, N.D. Oklahoma · 1947
3Cited by50 opinions
- Schmitz v. CommissionerUnited States Tax Court · 1968
- Commissioner of Internal Revenue v. Gazette Tel. Co.Court of Appeals for the Tenth Circuit · 1954
- Levinson v. CommissionerUnited States Tax Court · 1966
- Kenney v. CommissionerUnited States Tax Court · 1962
- United States & Thrift Corp. v. CommissionerUnited States Tax Court · 1958
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