Davies v. Commissioner
United States Tax Court
In 1987, P, former CEO and vice president of bankrupt Newbery Corp., entered into a settlement agreement regarding alleged preferential transfers. Pursuant to the agreement, P transferred $ 80,000 cash and the deed to his residence into escrow. P continued to occupy the residence after the agreement.
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In 1987, P, former CEO and vice president of bankrupt Newbery Corp., entered into a settlement agreement regarding alleged preferential transfers. Pursuant to the agreement, P transferred $ 80,000 cash and the deed to his residence into escrow. P continued to occupy the residence after the agreement. Held, transfer of $ 80,000 cash and the deed to residence into escrow satisfied the requirements of sec. 461(f): (1) A liability need not be in writing to qualify as an "asserted liability"; (2) P relinquished control of the residence by depositing the deed into escrow; and (3) the agreement…
1Opinion of the Court
OPINION
Wright, Judge:
Respondent determined a deficiency in petitioner’s 1987 Federal income tax in the amount of $111,155.63. The deficiency is based on a $300,700 adjustment to income. Petitioner did not contest $700 of the adjustment related to an increase in rental income. As such, only the $300,000 adjustment remains in dispute.
The sole issue for consideration for taxable year 1987 is whether under section 461(f)1 petitioner is entitled to a deduction in the amount of $300,000 comprised of $80,000 cash and the fair market value of his residence deposited into escrow during the year.
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2Cases cited16 opinions
- North American Oil Consolidated v. BurnetSupreme Court of the United States · 1932
- Healy v. CommissionerSupreme Court of the United States · 1953
- Southern Pacific Transp. Co. v. CommissionerUnited States Tax Court · 1980
- Kammert Bros. Enterprises, Inc. v. Tanque Verde Plaza Co.Arizona Supreme Court · 1967
- Consolidated Freightways, Inc. & Affiliates v. CommissionerUnited States Tax Court · 1980
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3Cited by7 opinions
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- Edison Bros. Stores v. CommissionerUnited States Tax Court · 1995
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