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gross income includes certain proceeds that they received in
settlement of a lawsuit. We hold it does. Section references
are to the Internal Revenue Code in effect for 1989. Rule
references are to the Tax Court Rules of Practice and Procedure.
Dollar amounts are rounded to the nearest dollar.
Background
All facts have been stipulated.1 The stipulated facts and
exhibits submitted therewith are incorporated herein by this
reference. When they petitioned the Court, petitioners resided
in The Woodlands, Texas.
From 1982 through 1990, Bobby E. Syphrett was president,
sole shareholder, and sole employee of a Texas corporation named
Intrastate Gas Gathering, Inc. (Intrastate). Intrastate’s
principal business activity was gas transmission.
In approximately 1980, Mr. Syphrett and Intrastate planned
with Jack R. Wiewall to develop five gas-gathering projects (the
projects). The projects contemplated the construction of
pipeline systems and related plant to collect natural gas from
producing properties and transport it to large pipelines for
shipment to major distribution centers. Mr. Wiewall’s role was
1 Petitioners ask the Court to find as facts certain
allegations that were made in pleadings in two State court
actions. We decline to do so. The record does not reveal
whether the opposing parties in those actions admitted or denied
these allegations, and the record does not otherwise allow us to
determine independently the validity of these allegations.
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Last modified: May 25, 2011