Commissioner v. Jackson Investment Co.
United States Court of Appeals for the Ninth Circuit
346 F.2d 187 (1965)
When Ethel Carter retired from her late husband’s construction company, George W. Carter Company, Jackson Investment Company and West Shore Company (plaintiffs) were the two remaining partners. The three partners signed an “Amendment of Limited Partnership Agreement of George W. Carter Co.” that explicitly recognized that the prior partnership agreements did not provide for any goodwill payments, “but George W. Carter Company will nevertheless make a payment to Ethel M. Carter in respect to goodwill as herein provided.” The partnership paid Ethel a total of $60,000 in three annual payments, including $19,650 in return for Ethel’s 15 percent interest in partnership assets and $40,350 as “a guaranteed payment, or a payment for good will.” Jackson Investment and West Shore deducted their respective shares of the payments from partnership income on their tax returns for those three years. The tax commissioner (defendant) assessed deficiencies against both companies on the ground that the payment for goodwill was not deductible. Jackson Investment and West Shore petitioned the tax court for review. The tax court—with six judges dissenting—decided against the commissioner, reasoning that the amendment was not part of the partnership agreement. The tax commissioner appealed.
Rule of Law
Holding and Reasoning (Barnes, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 707,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.Unlock this case briefRead our student testimonials
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.Learn about our approachRead more about Quimbee
Here's why 707,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 44,500 briefs, keyed to 983 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.