Estate of Robert E. Cartwright, Deceased, Dorothy G. Cartwright, Executrix - Page 33

                                       - 33 -                                         

          referral fees only to outside attorneys and associates, not                 
          to CSB shareholders; and (3) CSB owned its cases and work in                
          process.                                                                    
               Petitioner’s arguments do not take into account the fact               
          that the payment to decedent’s estate was set at $5 million                 
          pursuant to a written agreement between CSB and decedent and                
          was made because decedent performed services for CSB, such as               
          bringing cases to CSB.  CSB’s ownership of work in process, the             
          rights of other CSB shareholders, and CSB’s practices regarding             
          the payment of referral fees are not dispositive of whether any             
          part of the $5 million payment was income in respect of a                   
          decedent.                                                                   
               The $5 million payment from CSB was income in respect of a             
          decedent (to the extent it was not payment for decedent’s CSB               
          stock) because it was attributable to personal services decedent            
          provided to CSB and was payable on his death.  Estate of Bausch             
          v. Commissioner, 186 F.2d 313, 314 (2d Cir. 1951) (payments made            
          voluntarily by a corporation to decedents’ estates upon their               
          deaths in recognition of services to the corporation are income             
          in respect of a decedent), affg. 14 T.C. 1433 (1950); Collins v.            
          United States, 318 F. Supp. 382, 389 (C.D. Cal. 1970) (payments             
          made pursuant to a written agreement for 5 years to the wife of a           
          deceased employee of a company were income in respect of a                  
          decedent because the decedent bargained for those payments in               
          exchange for his services), affd. per curiam 448 F.2d 787 (9th              



Page:  Previous  15  16  17  18  19  20  21  22  23  24  25  26  27  28  29  30  31  32  33  34  Next

Last modified: May 25, 2011