Williams v. McGowan

KNIGHT, District Judge.

The case has been submitted on an agreed state of facts. Two questions are at issue, to wit: (1) Are attorneys’ fees paid for obtaining an income tax refund deductible expenses; and (2) Was the sale in question a sale of “capital assets”.

Aaron F. Williams, taxpayer, and one Jacob Reynolds were copartners in a hardware business commencing in 1926 and continuing until Reynolds died on July 18, 1940.. On September 6, 1940, the taxpayer purchased the Reynolds interest from the executrix of his will. The taxpayer had owned two-thirds interest in the business and Reynolds…