Jones v. Commissioner of Internal Revenue
| Decision Date | 22 March 1929 |
| Docket Number | No. 3933-3936.,3933-3936. |
| Citation | 31 F.2d 755 |
| Parties | JONES v. COMMISSIONER OF INTERNAL REVENUE, and three other cases. |
| Court | U.S. Court of Appeals — Third Circuit |
Ellis Ames Ballard and William R. Spofford, both of Philadelphia, Pa., for plaintiffs.
Mabel Walker Willebrandt, Asst. Atty. Gen., and Sewall Key and Morton P. Fisher, Sp. Asst. Attys. Gen. (C. M. Charest, Gen. Counsel, Bureau of Internal Revenue, of Washington, D. C., of counsel), for defendant.
Before BUFFINGTON, WOOLLEY, and DAVIS, Circuit Judges.
The pertinent facts in this case are that stockholders, who had substantially the same holdings in two affiliated corporations which had the same officials and office employees, joined in selling their stock to other parties for $3,029,400. This sum was deposited with a trust company for them, and by their consent was paid out by the trust company as follows: $9,822.25 for expenses incident to the sale of the stock; $2,719,517.75, representing the 46,687 shares of the selling stockholders at $58.25 per share, to the stockholders. The residue of $300,000 was distributed to the two companies' administrative staff, which included every one from president to stenographers. The question involved is whether this $300,000 was a nontaxable gift or taxable income. The Tax Board held it was income, and the taxpayers here concerned appealed.
The situation was that an unexpected good sale was being made of the coal, railroads, and mines. The administrative staff had been long employed, and it was felt that with the change of ownership they would lose their positions. It was at first thought they should and could be paid something by the companies, but it was determined the directors could not gratuitously dispose of the corporation's assets at the expense of the stockholders, for, as found by the Tax Board, none of these employees had anything whatever to do with securing a purchaser for the properties. But when later the stockholders individually, and without obligation on their part, or any consideration then or theretofore received or rendered them, chose, in recognition of the past faithful work of the staff, to gratuitously give them this financial recognition, and in doing so took from their own pockets and not from the assets of the companies, we are clear the gratuity thus bestowed was a gift, and that the case of Noel v. Parrott (C. C. A.) 15 F.(2d) 669, on which the Commission based its ruling, was different in its...
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Wallace v. Commissioner of Internal Revenue
...and it was expected that payees would lose their jobs by reason of the sale of all the stock of the corporation, Jones v. Commissioner of Internal Revenue, 3 Cir., 31 F.2d 755; and where the agreed compensation of a lawyer for a specific transaction had been paid and the client gave him in ......
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United States v. Du Pont
...was allowed in the amount of $1,044.48 ($997.62 plus $46.86 interest). 3 26 U.S.C.A. Int.Rev.Code, § 113(a) (4). 4 Cf. Jones v. Commissioner, 3 Cir., 31 F.2d 755, and Cunningham v. Commissioner, 3 Cir., 67 F.2d 205. 5 Cf. Willkie v. Commissioner, 6 Cir., 127 F.2d 953, certiorari denied Octo......
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Neville v. Brodrick, Civ. A. No. T-573.
...been called additional compensation and bonuses, and are taxable income to the recipient." (Emphases supplied.) 9 Distinguish Jones v. Commissioner, 3 Cir., 1929, 31 F.2d 755; Blair v. Rosseter, 9 Cir., 1929, 33 F.2d 286, 287; Abernethy v. Commissioner, D.C.Cir., 1954, 211 F.2d 651; Schall ......
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