Specialty Engineering Co. v. Commissioner
United States Tax Court
1. Capital Expenditure or Expense. -- Where a judgment awards a certain amount for the partnership interest of a retiring partner and another amount "in lieu of interest," the former amount is to be treated as in payment for a capital asset and the latter amount represents ordinary income of the recipient and an ordinary and necessary expense of the payor. 2. Lump Sum -- Allocation Between Expense and Capital. -- A lump sum compromise payment in satisfaction of a larger…
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1. Capital Expenditure or Expense. -- Where a judgment awards a certain amount for the partnership interest of a retiring partner and another amount "in lieu of interest," the former amount is to be treated as in payment for a capital asset and the latter amount represents ordinary income of the recipient and an ordinary and necessary expense of the payor. 2. Lump Sum -- Allocation Between Expense and Capital. -- A lump sum compromise payment in satisfaction of a larger judgment can be divided into ordinary and necessary expense and capital in the same proportion as those items appeared in…
1Opinion of the Court
OPINION.
Murdock, Judge'.
The Commissioner determined deficiencies for 1944 of $6,115.80 in income tax, $719.63 in declared value excess profits tax, and $73,900.10 in excess profits tax of Specialty Engineering Co., hereinafter called Specialty. The errors assigned by Specialty are the action of the Commissioner in disallowing (1) a deduction of $140,000 paid to John G. Ogden in settlement of a judgment; (2) a deduction of $13,509.35 representing counsel fees, accountants’ fees, and other costs of defending against Ogden’s claim; and (3), in the alternative, if the above items are capital…
2Cases cited3 opinions
- Murphy Oil Co. v. BurnetSupreme Court of the United States · 1932
- Kieselbach v. CommissionerSupreme Court of the United States · 1943
- Petit v. CommissionerUnited States Tax Court · 1947
3Cited by9 opinions
- Harrison E. Spangler and Myrtle B. Spangler v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1963
- Risko v. CommissionerUnited States Tax Court · 1956
- Dorzback v. CollisonDistrict Court, D. Delaware · 1950
- Glenshaw Glass Co. v. CommissionerUnited States Tax Court · 1952
- Kenworthy v. CommissionerUnited States Tax Court · 1952
4 more not listed; retrieve them via the Exa API.