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are:1 (1) Whether payments received by petitioner are income in
respect of a decedent and therefore includable in his gross
income under section 691(a);2 and (2) whether petitioner’s 1998
State income tax refund received during the taxable year 1999 is
includable in his 1999 gross income.
FINDINGS OF FACT
Petitioner Jack Carson Coleman resided in Colorado Springs,
Colorado, at the time his petition was filed. Petitioner’s
father (decedent) died intestate on January 3, 1993. Before his
death, decedent sold Grossmont Animal Hospital to another
veterinarian. As part of the sales transaction, decedent signed
a 10-year agreement not to compete (agreement) in consideration
of 120 monthly payments of $1,000.
As of the date of decedent’s death, the unexpired portion of
the agreement consisted of 108 monthly payments and was included
in decedent’s estate. For estate tax purposes the remaining
payments were assigned a value of $81,000, which reflected 75
percent of their face value (108,000 x 75%). On February 10,
1998, decedent’s estate was closed and petitioner received, inter
1 On the basis of petitioner’s failure to file a responding
brief, respondent moved for dismissal of this case for lack of
prosecution. Petitioner filed an objection to the motion and
requested a decision based on the hearing testimony and
respondent’s brief. We deny respondent’s motion and will decide
this case on its merits.
2 All section references are to the Internal Revenue Code in
effect for the year at issue.
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