Cooney v. Commissioner
United States Tax Court
65 T.C. 101 (1975)
- Written by Matthew Celestin, JD
Facts
William J. Cooney and others were members of a law partnership (the partnership). Some of the partners (the withdrawing partners) withdrew from the partnership while Cooney and three other partners (the continuing partners) (plaintiffs) continued as members. The partnership agreement laid out the process for liquidation of a partner’s interest, and the withdrawal was consistent with the partnership agreement. In exchange for their partnership interests, the withdrawing partners received payments from the partnership for unrealized receivables in the form of cash and discharge of the withdrawing partners’ share of liabilities. The continuing partners argued that, pursuant to § 736(a) of the Internal Revenue Code, the payments made to the withdrawing partners were in liquidation and therefore that the payments were deductible from the partnership’s income. However, the Commissioner of Internal Revenue (the Commissioner) (defendant) argued that, pursuant to § 741, the payments made to the withdrawing partners constituted a sale and therefore that the payments were not deductible from the partnership’s income.
Rule of Law
Issue
Holding and Reasoning (Featherston, J.)
What to do next…
Here's why 832,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 46,400 briefs, keyed to 994 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.
