Victor E. Gidwitz Family Trust v. Commissioner
United States Tax Court
Petitioners received $ 225,000 in settlement of a lawsuit for defendants' failure to grant options pursuant to an oral agreement. The options were orally promised by the controlling shareholder of MSC to induce petitioners as shareholders of MSC to approve a merger of MSC and GD.
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Petitioners received $ 225,000 in settlement of a lawsuit for defendants' failure to grant options pursuant to an oral agreement. The options were orally promised by the controlling shareholder of MSC to induce petitioners as shareholders of MSC to approve a merger of MSC and GD. Held, the sum received in settlement represented consideration for MSC stock surrendered by petitioners in addition to GD stock received in the merger, taxable as gain realized from the sale or exchange of capital assets. Petitioners' GD preference shares were redeemed on Apr. 15, 1966. The redemption price expressly…
1Opinion of the Court
Goffe, Judge:
Respondent determined deficiencies in the Federal income taxes for the taxable year 1966 against the petitioner in docket No. 4278-70 in the amount of $25,760.86, and against petitioner in docket No. 427.9-70 in the amount of $24,283.80. The two issues presented for decision are:(1) Whether amounts received by petitioners in settlement of a lawsuit constitute gain from the sale or exchange of a capital asset; and(2) "Whether all of the amounts received by the petitioners for redemption of preferred stock were in exchange for such stock and taxable as a capital gain under section…
2Cases cited9 opinions
- United States v. GilmoreSupreme Court of the United States · 1963
- Woodward v. CommissionerSupreme Court of the United States · 1970
- United States v. Hilton Hotels Corp.Supreme Court of the United States · 1970
- Raytheon Production Corp. v. Commissioner of Int. Rev.Court of Appeals for the First Circuit · 1944
- Megargel v. CommissionerUnited States Tax Court · 1944
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3Cited by13 opinions
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- Green v. CommissionerUnited States Tax Court · 1987
- Inco Electroenergy Corp. v. CommissionerUnited States Tax Court · 1987
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