Jacobs v. Commissioner
United States Tax Court
In April 1959, Credit, Inc., an accrual basis taxpayer, agreed to pay a retiring employee $ 100 per month until such payments totaled $ 10,000 or until she died, whichever occurred first. The corporation made 10 such payments between the signing of the agreement and February 1960, the date of its liquidation. Pursuant to the liquidation, its shareholders assumed the corporation's obligation under the agreement.
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In April 1959, Credit, Inc., an accrual basis taxpayer, agreed to pay a retiring employee $ 100 per month until such payments totaled $ 10,000 or until she died, whichever occurred first. The corporation made 10 such payments between the signing of the agreement and February 1960, the date of its liquidation. Pursuant to the liquidation, its shareholders assumed the corporation's obligation under the agreement. In its final return, Credit, Inc., claimed a "pension deduction" for the actuarially computed value of the unpaid obligation. Respondent disallowed the deduction. Held, the obligation…
1Opinion of the Court
Tannenwald, Judge:
Respondent determined a deficiency in petitioner’s income tax as transferee of Credit, Inc., for the period of August 1,1959, to February 9,1960, in the amount of $2,315.12. Petitioner has conceded liability as transferee for any deficiency determined herein against Credit, Inc., and has further conceded liability of Credit, Inc., for so much of the deficiency as is not related to the issue involved herein. That issue is the deductibility by Credit, Inc., in its final return of the commuted value of the unpaid balance of a liability to a retired employee.
FINDINGS OF FACT
This…
2Cases cited25 opinions
- Commissioner v. Gooch Milling & Elevator Co.Supreme Court of the United States · 1944
- Arrowsmith v. CommissionerSupreme Court of the United States · 1952
- Commissioner of Internal Revenue v. CarterCourt of Appeals for the Second Circuit · 1948
- Jud Plumbing & Heating, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1946
- Central Cuba Sugar Co. v. Commissioner of Internal Revenue. Commissioner of Internal Revenue v. Central Cuba Sugar CoCourt of Appeals for the Second Circuit · 1952
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