Stanton v. Commissioner of Internal Revenue

KERNER, Circuit Judge.

The problem presented by this review of two decisions of the Tax Court is whether certain 1944 income derived from the activities of the Feed Sales Company, a partnership, is taxable to the two taxpayers as individual partners or as trustees of two trusts to which they assigned their entire partnership interests for the benefit of close relatives — the mother in one case, the wife in the other. The solution depends on whether the income was produced mainly by personal service, as the Tax Court found, or by capital consisting principally of good will, as petitioners…