Quimbee logo
DMCA.com Protection Status
From our private database of 18,800+ case briefs...

Raytheon Production Corporation v. Commissioner

United States Court of Appeals for the First Circuit
144 F.2d 110 (1st Cir.), cer. denied, 323 U.S. 779 (1944)


 

Facts

Raytheon Production Corporation (Raytheon) (plaintiff) originally made tubes used in radio sets. The Radio Corporation of America (RCA) had patents that covered radio circuits and entered into cross-licensing agreements with several companies, including General Electric, Westinghouse, and AT & T. RCA subsequently developed a competitive tube to Raytheon's tube. In 1927, RCA began requiring its licensees to buy tubes from RCA. Raytheon's sales dropped, and Raytheon brought an antitrust action against RCA in federal court. Raytheon alleged that Raytheon's tube business and valuable good will had been destroyed and that it had suffered damages of $3 million. RCA subsequently sued Raytheon for nonpayment of royalties and obtained a judgment for $410,000 against Raytheon. Raytheon then agreed to a $410,000 payment from RCA to settle the antitrust action. Raytheon's officers said that $60,000 of that settlement amount was the worth of Raytheon's patents for its tubes. In its income-tax returns, Raytheon treated the $60,000 as income but treated the remaining $350,000 of the settlement as a return of capital and not as taxable income. The Commissioner of Internal Revenue (defendant) disagreed and informed Raytheon that the $350,000 was taxable income. The Commissioner thus found a deficiency in that amount on Raytheon's tax returns. Raytheon challenged the Commissioner's determination in Tax Court. The Tax Court upheld the Commissioner's determination, and Raytheon appealed to the United States Court of Appeals for the First Circuit.

Rule of Law

Issue

Holding and Reasoning (Mahoney, J.)

What to do next…

  1. 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 499,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.

  2. 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. Read more about Quimbee.

Here's why 499,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 18,800 briefs, keyed to 985 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.

Questions & Answers


Have a question about this case?

Sign up for a free 7-day trial and ask it

Sign up for a FREE 7-day trial