W. B. Davis & Son, Inc. v. Commissioner
United States Tax Court
1. Amounts agreed by the petitioner corporation to be paid to its president out of royalties received under a patent license granted by it to another corporation, held to be expenditures made for the acquisition of the president's interest in the inventions and patent applications, and not deductible as ordinary and necessary business expenses. 2. After acquiring the inventor's rights in inventions and patent applications in 1935, the petitioner paid the cost of defending…
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1. Amounts agreed by the petitioner corporation to be paid to its president out of royalties received under a patent license granted by it to another corporation, held to be expenditures made for the acquisition of the president's interest in the inventions and patent applications, and not deductible as ordinary and necessary business expenses. 2. After acquiring the inventor's rights in inventions and patent applications in 1935, the petitioner paid the cost of defending the patent applications in interference proceedings and obtained letters patent in 1942. In 1935 the petitioner granted a…
1Opinion of the Court
OPINION.
Tyson, Judge:
The first and second issues herein concern the invention of Kobert E. Davis relating to the automatic top machine and processes and the royalty payments received by the petitioner under the patent license granted to Interwoven and dated July 1,1935. The first issue is whether the petitioner is entitled to deduct in the years 1939 and 1940, as ordinary and necessary business expenses, amounts equal to one-fourth of the royalties received in 1939 and 1940, which amounts it claims it became obligated to pay in those years to Charles A. Noone, trustee, under the resolution of…
2Cases cited6 opinions
- Morton Salt Co. v. G. S. Suppiger Co.Supreme Court of the United States · 1942
- Murphy Oil Co. v. BurnetSupreme Court of the United States · 1932
- Standard Parts Co. v. PeckSupreme Court of the United States · 1924
- Premier Products Co. v. CommissionerUnited States Tax Court · 1943
- Johnson Furnace & Engineering Co. v. Western Furnace Co.Court of Appeals for the Eighth Circuit · 1910
1 more not listed; retrieve them via the Exa API.
3Cited by54 opinions
- W. B. Knight Machinery Co. v. CommissionerUnited States Tax Court · 1946
- Bullock v. CommissionerUnited States Tax Court · 1956
- Ramsey Accessories Mfg. Corp. v. CommissionerUnited States Tax Court · 1948
- The Citizens Bank of Weston v. Commissioner of Internal RevenueCourt of Appeals for the Fourth Circuit · 1958
- Citizens Bank of Weston v. CommissionerUnited States Tax Court · 1957
49 more not listed; retrieve them via the Exa API.