OKC Corp. v. Commissioner
United States Tax Court
1. During 1971, in settlement of a lawsuit over the price to be paid under a refined products output contract, X forgave over $ 2.6 million in principal indebtedness that Y owed it for Y's purchase of a refinery from X in 1966. Held: The discharge of indebtedness constituted a payment in settlement of a claim for profits; accordingly, the settlement "proceeds" are ordinary income to Y. The exclusion provided by sec. 108, I.R.C. 1954, does not apply. 2. During 1969, Y began…
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1. During 1971, in settlement of a lawsuit over the price to be paid under a refined products output contract, X forgave over $ 2.6 million in principal indebtedness that Y owed it for Y's purchase of a refinery from X in 1966. Held: The discharge of indebtedness constituted a payment in settlement of a claim for profits; accordingly, the settlement "proceeds" are ordinary income to Y. The exclusion provided by sec. 108, I.R.C. 1954, does not apply. 2. During 1969, Y began construction of an HF alkylation unit at the refinery. Prior to Apr. 19, 1969, Y staked out the jobsite and had test soil…
1Opinion of the Court
OKC Corp. and Subsidiaries, Petitioner v. Commissioner of Internal Revenue, Respondent; OKC Refining, Inc. (formerly Okmulgee Refining Co., Inc.), Petitioner v. Commissioner of Internal Revenue, Respondent
OKC Corp. v. Commissioner
Docket Nos. 15099-80, 15100-80
United States Tax Court
82 T.C. 638; 1984 U.S. Tax Ct. LEXIS 78; 82 T.C. No. 51;
April 25, 1984, Filed
Decisions will be entered under Rule 155.
1. During 1971, in settlement of a lawsuit over the price to be paid under a refined products output contract, X forgave over $ 2.6 million in principal indebtedness that Y owed it for Y's purchase…
2Cases cited43 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Lyeth v. HoeySupreme Court of the United States · 1938
- United States v. Kirby Lumber CoSupreme Court of the United States · 1931
- Commissioner v. JacobsonSupreme Court of the United States · 1949
- Helvering v. American Dental Co.Supreme Court of the United States · 1943
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