Dorsey v. Comm'r of Internal Revenue, Docket Nos. 3149-65
| Decision Date | 15 March 1968 |
| Docket Number | 274-66,1787-66,6809-65,314-66,5887-66,1440-66,1441-66,7061-65,570-66,1872-66,5878-66,6594-65,5879-66,532-66,6994-65,1319-66,444-66,6164-66.,Docket Nos. 3149-65,6569-65,1317-66,206-66,439-66 |
| Citation | 49 T.C. 606 |
| Parties | STEPHEN H. DORSEY, ET AL.,1 PETITIONERS v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT |
| Court | U.S. Tax Court |
OPINION TEXT STARTS HERE
George O. Philips and Francis E. Marshall, for the petitioners.
Dennis C. DeBerry, for the respondent.
Petitioners were stockholders of APC, which owned the patents for the first workable automatic pinsetting machine for bowling. On Feb. 4, 1947. APC assigned its interests in the invention to AMF for $200,000 cash, 25,000 shares of AMF stock, and 1 percent of all receipts by AMF from the sale or lease of the automatic pinsetting machines for a period of 20 years. APC then adopted a plan of partial liquidation. On or about Sept. 16, 1954, APC was completely liquidated and its assets distributed in kind to its stockholders. Camden Trust Co. was appointed their agent to receive future payments from AMF, and the stockholders of APC surrendered their stock for participating certificates. Held, the rights of petitioners to receive future percentage-of-profits payments had no ascertainable fair market value on Sept. 16, 1954, and therefore the amount received by them are taxable as long-term capital gains. Held, further, the amounts received by the Estate of Harmon Baugh, and Myrtle Oler Teichmann, deceased, are taxable as income in respect of a decedent under sec. 691, I.R.C. 1954.
In these consolidated cases the Commissioner determined the following income tax deficiencies against the petitioners:
+-----------------------------------------------------------------------------+
¦Petitioners ¦Taxable¦Deficiency¦
+----------------------------------------------------------+-------+----------¦
¦ ¦No. ¦year ¦ ¦
+--------------------------------------------------+-------+-------+----------¦
¦Stephen H. Dorsey ¦3149-65¦1961 ¦$310.97 ¦
+--------------------------------------------------+-------+-------+----------¦
¦Leonard R. Oler and Ida Oler ¦6569-65¦1960 ¦1,091.15 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1961 ¦1,456.21 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1962 ¦2,654.56 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1963 ¦2,463.49 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1964 ¦694.66 ¦
+--------------------------------------------------+-------+-------+----------¦
¦Stanley E. Oler and Florence Oler ¦6594-65¦1961 ¦574.91 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1962 ¦752.50 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1963 ¦771.99 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1964 ¦315.38 ¦
+--------------------------------------------------+-------+-------+----------¦
¦Helen G. Winchester and Edgar T. Winchester ¦6809-65¦1962 ¦180.21 ¦
+--------------------------------------------------+-------+-------+----------¦
¦William B. Dorsey, Jr ¦6994-65¦1961 ¦302.36 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1962 ¦171.00 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1963 ¦166.00 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1964 ¦148.00 ¦
+--------------------------------------------------+-------+-------+----------¦
¦William B. Dorsey and Ida S. Dorsey ¦7061-65¦1960 ¦977.78 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1961 ¦1,027.87 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1962 ¦1,476.77 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1963 ¦1,698.59 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1964 ¦1,067.36 ¦
+--------------------------------------------------+-------+-------+----------¦
¦Helen S. Hammell ¦206-66 ¦1961 ¦1,642.54 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1962 ¦1,861.81 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1963 ¦1,952.94 ¦
+--------------------------------------------------+-------+-------+----------¦
¦W. Ernest Flemming and Aileen Flemming ¦274-66 ¦1961 ¦696.44 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1962 ¦609.85 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1963 ¦542.62 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1964 ¦543.82 ¦
+--------------------------------------------------+-------+-------+----------¦
¦Paul Hollingsworth and Elizabeth Hollingsworth ¦314-66 ¦1961 ¦375.09 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1962 ¦449.99 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1963 ¦569.88 ¦
+--------------------------------------------------+-------+-------+----------¦
¦Edward W. Howe and Blanche G. Howe ¦439-66 ¦1961 ¦425.95 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1962 ¦610.30 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1963 ¦624.97 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1964 ¦524.15 ¦
+--------------------------------------------------+-------+-------+----------¦
¦Alwyn L. Newman and Lillian R. Newman ¦444-66 ¦1961 ¦1,201.93 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1962 ¦1,395.15 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1963 ¦1,133.82 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1964 ¦736.56 ¦
+--------------------------------------------------+-------+-------+----------¦
¦Ruth Hollingsworth ¦532-66 ¦1962 ¦123.48 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1963 ¦1 43.52 ¦
+--------------------------------------------------+-------+-------+----------¦
¦Elsie H. Luethy ¦570-66 ¦1961 ¦5,384.38 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1962 ¦6,755.85 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1963 ¦6,827.72 ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1964 ¦5,693.32 ¦
+--------------------------------------------------+-------+-------+----------¦
¦Estate of Myrtle M. Oler Teichmann (Edward I. ¦1317-66¦1962 ¦15,355.76 ¦
¦Berry, Executor) ¦ ¦ ¦ ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1963 ¦1 ¦
¦ ¦ ¦ ¦10,301.63 ¦
+--------------------------------------------------+-------+-------+----------¦
¦Estate of Myrtle M. Oler (Edward I. Berry, ¦1319-66¦1960 ¦13,531.66 ¦
¦Executor) ¦ ¦ ¦ ¦
+--------------------------------------------------+-------+-------+----------¦
¦ ¦ ¦1961 ¦13,750.44 ¦
+--------------------------------------------------+-------+-------+----------¦
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