Campbell v. Commissioner
United States Court of Appeals for the Eighth Circuit
943 F.2d 815 (1991)
Facts
William Campbell (plaintiff) worked for a collection of businesses that helped with the formation of limited partnerships. One such business was Summa T. Realty (Summa). Campbell was responsible for locating and acquiring properties for Summa and organizing partnerships that would eventually purchase the properties. In return for his help, Campbell received profits interests in the partnerships he helped form, meaning that he would be entitled to a percentage of the future profit of each partnership. In 1979 and 1980, Campbell helped three partnerships to form and to purchase property, and Campbell received 1 to 2 percent profits interests in each partnership. Campbell did not include the profits interest in his taxable income. The Commissioner of Internal Revenue (the Commissioner) (defendant) assessed deficiencies on Campbell’s 1979 and 1980 income-tax returns, arguing that Campbell should have included the value of each profits interest in his ordinary income. The United States Tax Court agreed that the profits interests should be included in Campbell’s income but disagreed as to the valuation method for determining the amount of income to report. Campbell appealed.
Rule of Law
Issue
Holding and Reasoning (Beam, J.)
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