Taxation (Essay Sample)

Taxation
Student’s Name
Institutional Affiliation
Taxation
Summary of the Case
The case involved the US as the plaintiff- Appellee and Taxpayers DeNean and Flora Strafford as defendants- appellants. The defendant seek the appeal claiming a tax refund and for an allegedly overpaid taxes. According to the tax return filed by Stafford in1969, they claim that, they failed to deduct an income of valued as $100, 000 which came from their partnership interest. The partners argued that the partner interest was exempted because it qualifies for non-recognition treatment as stipulated under I.R.C sec 721. Referring to I.R.C sec 721, income was received in exchange for properties, which the two partners contributed to the partnership.
Issue of the Case
The District court overrule that, the receipt of the partnership interest from the exchange of property does not qualify for non-recognition treatment because there was an issue regarding the letter of intent. The Court held that, the letter of intent to the partners did not meet the stipulated requirement on exchange and properties under partnership. The partnership had sold the acquired units of $100, 000 shares and the and the agreement was c...