Maxwell v. Commissioner
United States Tax Court
P and his wife were the founders, controlling shareholders, and principal officers of H. P sustained serious physical injuries while in H's employment. P served a written demand upon H asking compensation for his injuries. Thereafter, based upon the advice of their respective attorneys regarding H's liability, P and H executed a settlement agreement under which H paid P $ 122,500. Held: The payment from H to P was for damages on account of personal injuries.
Read the full summary
P and his wife were the founders, controlling shareholders, and principal officers of H. P sustained serious physical injuries while in H's employment. P served a written demand upon H asking compensation for his injuries. Thereafter, based upon the advice of their respective attorneys regarding H's liability, P and H executed a settlement agreement under which H paid P $ 122,500. Held: The payment from H to P was for damages on account of personal injuries. P is entitled to exclude this amount from gross income under sec. 104(a)(2), I.R.C. 1954, and H is entitled to a deduction in this…
1Opinion of the Court
FINDINGS OF FACT
RUWE, Judge:
Respondent determined a deficiency of $64,185 in Peter E. Maxwell’s and Helen E. Maxwell’s Federal income tax for the taxable year ending December 31, 1977. In a separate notice of deficiency, respondent determined a deficiency of $58,800 in the Federal corporate income tax of Hi Life Products, Inc., for its taxable year ending October 31, 1977. The issues for decision are: (1) Whether petitioner Hi Life Products, Inc., is entitled to deduct as an ordinary and necessary business expense under section 162(a)2 a payment of $122,500 made to Peter E. Maxwell; and (2)…
2Cases cited29 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Gregory v. HelveringSupreme Court of the United States · 1935
- James E. Threlkeld v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1988
- Threlkeld v. CommissionerUnited States Tax Court · 1986
- Donald A. Peck Judith W. Peck v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1990
24 more not listed; retrieve them via the Exa API.
3Cited by8 opinions
- Weaver v. Comm'rUnited States Tax Court · 2003
- Chapman v. CommissionerUnited States Tax Court · 1997
- Diesel Country Truck Stop, Inc. v. CommissionerUnited States Tax Court · 2000
- Jimmy D. and Marlene M. Morloc Weaver v. CommissionerUnited States Tax Court · 2003
- Maxwell v. CommissionerUnited States Tax Court · 1990
3 more not listed; retrieve them via the Exa API.