Arthur C. Brincat - Page 7




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          attorney $40,000 to represent it in the above-described                      
          proceedings.                                                                 
                                       OPINION                                         
          Are Petitioners Required To Include in Gross Income the Amounts              
          Received From the Sale of the Building?                                      
               Respondent contends that petitioners diverted $272,100                  
          ($136,550 and $135,550) from Magna Carta through the trust to                
          themselves and that those amounts are taxable to them.                       
          Respondent sees this as nothing more or less than the “income                
          from whatever source” referenced in section 61(a).  See also                 
          North American Oil Consol. v. Burnet, 286 U.S. 417 (1932).                   
          Conversely, petitioners contend that these amounts are simply                
          inheritances from their father’s estate planning trust and are               
          excluded from gross income in accord with section 102(a).                    
          Petitioners base their contention on the premise that Victor had             
          lent money to Magna Carta and the proceeds of the sale of the                
          building were merely repayment of amounts owed Victor.                       
          Respondent argues that petitioners are collaterally estopped from            
          asserting that Magna Carta owed Victor any portion of the                    
          proceeds of the sale of the building or that they are entitled to            
          any portion of the $272,100 from the estate of Victor, the trust,            
          or Magna Carta.  We agree with respondent.                                   
               Once a factual finding or holding is “actually and                      
          necessarily determined by a court of competent jurisdiction, that            
          determination is conclusive in subsequent suits based on a                   





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