Morvay v. Commissioner

Board of Tax Appeals

Morvay v. Commissioner

19 B.T.A. 928, 1930 BTA LEXIS 2302

CourtUnited States Board of Tax Appeals

DecidedMay 12, 1930

DocketDocket Nos. 38983, 38984.

StatusPublished

Cited by3 cases

This text of 19 B.T.A. 928 (Morvay v. Commissioner) is published on Counsel Stack Legal Research, covering United States Board of Tax Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Morvay v. Commissioner, 19 B.T.A. 928, 1930 BTA LEXIS 2302 (bta 1930).

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Opinion

[930]*930OPINION.

Black:

The petitioners allege that the respondent erred in failing to take into consideration in determining the taxable profit on the sale of their interest in a partnership the value' of their services in building up alleged good will. Since the petitioners have failed to produce sufficient evidence to enable us to determine the value of good will on March 1, 1913, or subsequent thereto, this contention must be resolved in favor of the respondent.

The other issue deals with the determination of the profit realized by each of the petitioners on the sale of their interests in the partnership of Morvay & Schrank. The respondent in computing the gain arising from the sale of the partnership assets deducted from the sale price the cost of the interest in the partnership plus the undistributed net income earned since the formation of the partnership. These computations are in accord both with the facts as proven as well as article 1603 of Regulations 69, which reads as follows:

Readjustment of partnership interests. — When a partner retires from a partnership, or it is dissolved, he realizes a gain or loss measured by the difference between the price received for his interest and the cost to him of his interest in the partnership, including in such cost the amount of his share in any undistributed partnership net income earned since he became a partner on which the income tax has been paid. * * *

Judgment will be entered for the respondent.

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[930]*930OPINION.

Black:

The petitioners allege that the respondent erred in failing to take into consideration in determining the taxable profit on the sale of their interest in a partnership the value' of their services in building up alleged good will. Since the petitioners have failed to produce sufficient evidence to enable us to determine the value of good will on March 1, 1913, or subsequent thereto, this contention must be resolved in favor of the respondent.

The other issue deals with the determination of the profit realized by each of the petitioners on the sale of their interests in the partnership of Morvay & Schrank. The respondent in computing the gain arising from the sale of the partnership assets deducted from the sale price the cost of the interest in the partnership plus the undistributed net income earned since the formation of the partnership. These computations are in accord both with the facts as proven as well as article 1603 of Regulations 69, which reads as follows:

Readjustment of partnership interests. — When a partner retires from a partnership, or it is dissolved, he realizes a gain or loss measured by the difference between the price received for his interest and the cost to him of his interest in the partnership, including in such cost the amount of his share in any undistributed partnership net income earned since he became a partner on which the income tax has been paid. * * *

Judgment will be entered for the respondent.

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19 B.T.A. 928, 1930 BTA LEXIS 2302, Counsel Stack Legal Research, https://law.counselstack.com/opinion/morvay-v-commissioner-bta-1930.

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