Court Opinion

ID: 5520748
Source: CourtListenerOpinion
Date Created: 2022-01-10 17:43:43.370451+00
Date Added: 2024-06-11T08:34:24.427981
License: Public Domain

Per Curiam.

The administratrix of the estate of Bernard Rosenthal and defendant corporation entered into a contract for the sale to the corporation of corporate stock which the decedent had owned during his lifetime. Pursuant to the agreement, there was deducted from the sale price the seller’s “proportionate share” of a tax reserve set up for payment by the corporation of contemplated Federal income taxes for the period involved. A fair reading of the contract establishes that the seller was to recover a proportionate share of tax savings whether or not the method of reporting income was required by the Government to be changed from a cash basis to an accrual basis. Since no part of the tax reserve was ever collected by the Government, and it is conceded that no tax is due, the plaintiffs herein, as Bernard Rosenthal’s heirs, are entitled to the amount fixed by the trial court as the seller’s proportionate share of the tax savings.
The judgment of the Appellate Division should be reversed and that of Trial Term reinstated, with costs in this court and in the Appellate Division.
Chief Judge Desmond and Judges Dye, Fuld, Van Voorhis, Burke, Scileppi and Bergan concur.
Judgment reversed, etc.