Gordon v. CIR, 17227.
| Citation | 262 F.2d 413 |
| Decision Date | 11 December 1958 |
| Docket Number | No. 17227.,17227. |
| Parties | David L. GORDON and Clare (Clara) B. Gordon, Petitioners, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. William C. HILDEBRAND, Jr. and Jacqueline Hildebrand, Petitioners, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. |
| Court | United States Courts of Appeals. United States Court of Appeals (5th Circuit) |
Douglas W. McGregor, Houston, Tex. (McGregor, Sewell & Junell, Houston, Tex., of counsel), for petitioners.
Joseph Kovner, James P. Turner, I. Henry Kutz, Lee A. Jackson, Dept. of Justice, Washington, D. C., John M. Morawski, Special Atty., Arch M. Cantrall, Chief Counsel, Internal Revenue Service, Washington, D. C., Charles K. Rice, Asst. Atty. Gen., for respondent.
Before HUTCHESON, Chief Judge, and RIVES and WISDOM, Circuit Judges.
These petitions for review involve deficiencies in income taxes for the year 1950. They arise out of the determination of the Commissioner, sustained by the Tax Court, 29 T.C. 510, that the lump sum paid petitioners in that year in settlement of the payments remaining due on their employment agreement with Donner Foundation was ordinary income and not, as petitioners had reported it, long term gains from the sale of an interest in the tanker, "Torrance Hills".
Here on a single specification of error, that the tax court erred in holding that petitioners did not sell a capital asset and receive a capital gain, petitioners urge upon us that its judgment should be reversed and the deficiency set aside.
We do not think so. On the contrary, we think it is petitioners who err when they say that the sums in question here were paid them not in settlement of the payments remaining due on their employment agreement but as the proceeds of a "sale of their contract and rights in the Tanker", a sale in short of a capital asset.
Because the facts are undisputed and the tax court has in its opinion fully and correctly stated them, we will not restate them here, but, adopting the statement in the opinion, content ourselves with stating briefly those we deem controlling.
The first is that the letter contract with Hildebrand, set out in full in the opinion, in terms provides not for the acquisition and ownership by petitioners of an interest in the tanker but for annual payments of $33,333.33 for the ensuing six years for services performed and to be performed for the account of Donner Foundation as owner of the tanker.
The second is that when, after three annual payments had been made on the contract and three annual payments, aggregating $100,000.00 remained due, Donner sold the tanker, the remaining payments were settled for the liquidated sum of $93,125.89 and the obligations of the contract were satisfied and discharged.
The...
To continue reading
Request your trial
-
Bisbee-Baldwin Corporation v. Tomlinson
...to be earned by the taxpayer's efforts caused the compensation for this right to be classified as ordinary income. In Gordon v. Commissioner, 5 Cir. 1958, 262 F.2d 413 this Court held that a lump-sum settlement of payments to be earned under an employment contract were taxable as ordinary i......
-
Koss v. Commissioner
...supra; Estate of Smith v. Commissioner, supra; Gordon v. Commissioner Dec. 22,711, 29 T.C. 510, 514 (1957), affd. 59-1 USTC ¶ 9125 262 F.2d 413 (5th Cir. 1958); Farr v. Commissioner Dec. 16,621, 11 T.C. 552, 560 (1948), affd. sub nom. Sloane v. Commissioner 51-1 USTC ¶ 9226, 188 F.2d 254, 2......
-
Maryland Coal and Coke Company v. McGinnes
...v. Eidson, 310 F.2d 111 (5th Cir. 1962), rehearing, 312 F.2d 744 (1963); Holt v. Comm'r, 303 F.2d 687 (9th Cir. 1962); Gordon v. Comm'r, 262 F.2d 413 (5th Cir. 1958); Comm'r v. Pittston Co., 252 F.2d 344 (2nd Cir. 1958), cert. denied, 357 U.S. 919, 78 S.Ct. 1360, 2 L.Ed.2d 1364 (1958); Rosc......
-
Drybrough v. Comm'r of Internal Revenue, Docket No. 87956.
...1.61-2, Income Tax Regs.,15 and cases such as Thurlow E. McFall, 34 B.T.A. 108 (1936); David L. Gordon, 29 T.C. 511 (1957), affd. 262 F.2d 413 (C.A. 5, 1958); and Merten E. Farr, 11 T.C. 552 (1948) affirmed sub nom. Sloane v. Commissioner, 188 F.2d 254 (C.A. 6, 1951). We cannot agree with r......