Pennroad Corp. v. Commissioner
United States Tax Court
1. Where petitioner received $ 15,000,000 in settlement of two derivative stockholders' suits against The Pennsylvania Railroad Company charging breach of a fiduciary relationship in causing improper investment of petitioner's funds, the entire amount received resulted in no income taxable to petitioner. 2. Legal fees and expenses incurred in connection with litigation and settlement of claims resulting in recovery of capital held not deductible as ordinary and necessary…
Read the full summary
1. Where petitioner received $ 15,000,000 in settlement of two derivative stockholders' suits against The Pennsylvania Railroad Company charging breach of a fiduciary relationship in causing improper investment of petitioner's funds, the entire amount received resulted in no income taxable to petitioner. 2. Legal fees and expenses incurred in connection with litigation and settlement of claims resulting in recovery of capital held not deductible as ordinary and necessary business expenses.
1Opinion of the Court
The Pennroad Corporation and Affiliated Companies, Petitioner, v. Commissioner of Internal Revenue, Respondent
Pennroad Corp. v. Commissioner
Docket No. 33309
United States Tax Court
21 T.C. 1087; 1954 U.S. Tax Ct. LEXIS 255;
March 31, 1954, Promulgated
Decision will be entered under Rule 50.
1. Where petitioner received $ 15,000,000 in settlement of two derivative stockholders' suits against The Pennsylvania Railroad Company charging breach of a fiduciary relationship in causing improper investment of petitioner's funds, the entire amount received resulted in no income taxable to petitioner.
2.…
2Cases cited14 opinions
- Lucas v. American Code Co.Supreme Court of the United States · 1930
- Doyle v. Mitchell Brothers Co.Supreme Court of the United States · 1918
- Overfield v. Pennroad CorporationCourt of Appeals for the Third Circuit · 1944
- Helvering v. StormfeltzCourt of Appeals for the Eighth Circuit · 1944
- Overfield v. Pennroad CorporationDistrict Court, E.D. Pennsylvania · 1941
9 more not listed; retrieve them via the Exa API.