Foote v. Commissioner
United States Tax Court
Petitioner, a tenured professor at Southern Methodist University, resigned his position and gave up his tenure in return for negotiated compensation. Held: Tenure is not a capital asset and petitioner's release of his tenure was not a sale or exchange. The amount received by petitioner on termination of his contract was taxable as ordinary income rather than capital gain.
1Opinion of the Court
Drennen, Judge:
Respondent determined deficiencies in petitioner’s Federal income taxes for the years 1977 and 1978 in the amounts of $2,715 and $4,074, respectively. The primary issue is whether money paid to petitioner pursuant to his resignation of his tenured faculty position at Southern Methodist University is taxable as ordinary income or as long-term capital gain. Petitioner also argues that the Court erred in sustaining respondent’s objection to a question posed to a witness at trial.
FINDINGS OF FACT
Some of the facts have been stipulated and are found accordingly. The stipulation of…
2Cases cited19 opinions
- Commissioner v. P. G. Lake, Inc.Supreme Court of the United States · 1958
- Commissioner v. Gillette Motor Transport, Inc.Supreme Court of the United States · 1960
- Commissioner of Internal Revenue v. José FerrerCourt of Appeals for the Second Circuit · 1962
- Luna v. CommissionerUnited States Tax Court · 1964
- Commissioner of Internal Revenue v. Starr Bros., IncCourt of Appeals for the Second Circuit · 1953
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3Cited by2 opinions
- Foote v. CommissionerUnited States Tax Court · 1983
- Herrick v. CommissionerUnited States Tax Court · 1984