- 3 -
agrees with and adopts the opinion of the Special Trial Judge,
which is set forth below.
OPINION OF THE SPECIAL TRIAL JUDGE
PANUTHOS, Chief Special Trial Judge: Respondent determined
a deficiency in petitioners’ Federal income tax of $2,519 for
1997. All references to petitioner are to Warren L. Baker, Jr.
After a concession by petitioners,3 the issue for decision
is whether the termination payment received by petitioner upon
retirement as an insurance agent of State Farm Insurance Cos. is
taxable as capital gain or ordinary income.
Background
Some of the facts have been stipulated and are so found.
The stipulated facts and the related exhibits are incorporated
herein by this reference. At the time of filing the petition,
petitioners resided in Fairview Heights, Illinois.
I. Petitioner’s Agreement With State Farm
a. General
Petitioner began his relationship with State Farm Insurance
Cos. (State Farm) on January 19, 1963. State Farm consisted of
State Farm Mutual Automobile Insurance Co., State Farm Life
2(...continued)
Court Rules of Practice and Procedure, unless otherwise
indicated.
3 Petitioners concede that they failed to report dividend
income of $919 from Magna Group, Inc.
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