Case ID: bta_16/html/1426-01.html
Source: Caselaw Access Project
Author: {"author": "MaRquette :", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Fred J. Collins, Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 26672.
    Promulgated July 25, 1929.
    
      John E. Hughes, Esq., and William Cogger, Esq., for the petitioner.
    
      Arthur Carnduff, Esq., for the respondent.
   OPINION.

MaRquette :

It is contended on behalf of the petitioner that he was wrongfully advised to report in his return for 1922 that he had realized a gain of $12,500 from the sale of his stock in the Mid-City Park Corporation, and had sustained a loss on the cancellation of his contract of employment, but that, although the method of reporting was erroneous, the result reached was correct, in that the petitioner’s income from the transaction was only $5,000 in the year 1922. The petitioner’s counsel concede that the contract of employment had no value, and that the petitioner sustained no loss on its termination.

We are of opinion that the petitioner’s contention is well taken and should be sustained. The evidence is clear that in 1920 and 1921 he received as part of the compensation for his services, stock of the Mid-City Park Corporation of the par value of $7,500, and we are satisfied that the stock had a fair market, or actual cash value at that time equal to its par value, and to that extent was income to the petitioner when he received it. He also received stock of the par value of $5,000 in 1922, and in the same year, upon cancellation of his contract of employment, he returned to the corporation all of the stock in exchange for $12,500 in cash. On the record it is evident that the petitioner’s income for 1922 from this transaction was only $5,000.

Judgment will be entered under Bule 50.