Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

FENSEL v. UNITED STATES

August 7, 1985

PETER T. FENSEL, Plaintiff
v.
UNITED STATES OF AMERICA, Defendant


Glenn E. Mencer, United States District Judge.


The opinion of the court was delivered by: MENCER

The plaintiff, Peter T. Fensel, brought suit seeking a refund of part of the federal income taxes paid by him for 1978 and 1979. This tax was paid on partnership income attributed to the plaintiff by a partnership doing business as "The Pub" in which he was allegedly a partner. The plaintiff contends that he received no income or anything of value from The Pub in those years because the partnership had been terminated by mutual agreement in 1977. The defendant, the United States of America, alleges, on the other hand, that the partnership was not terminated and that the plaintiff is, therefore, liable for taxes on his share of the partnership's income in 1978 and 1979. The plaintiff further contends, however, that he never received a share of the partnership's income, which leads him to ask this Court, in the alternative, to allow him theft losses for the amounts attributed to him if we find that the partnership was not terminated in 1977. The plaintiff also seeks attorneys fees.

 Both sides have filed Motions for Summary Judgment. The plaintiff's Motion is supported by his affidavit and exhibits while the defendant's Motion relies primarily on the plaintiff's deposition.

 A court, when considering a motion for summary judgment, should only grant the motion "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). All inferences, doubts and issues of credibility are to be resolved against the moving party. E.E.O.C. v. Westinghouse Electric Corp., 725 F.2d 211, 216 (3d Cir. 1983).

 PARTNERSHIP TERMINATION

 The plaintiff, in his Motion for Summary Judgment, asks this Court to find that the partnership in question was terminated in 1977 and to grant him a tax refund. The defendant requests that we find that the partnership was not terminated until 1980 and that the plaintiff is not entitled to any refund.

 This Court is of the view that summary judgment is appropriate with regard to the partnership termination issue as there are no material facts left to be resolved. A partnership, to be viewed as terminated, must comply with the requirements of 26 U.S.C. § 708(b)(1), which states in the appropriate part that:

 
[A] partnership shall be considered as terminated only if --
 
(A) no part of any business, financial operation, or venture of the partnership continues to be carried on by any of its partners in a partnership, or
 
(B) within a 12-month period there is a sale or exchange of 50 percent or more of the total interest in partnership capital and profits.

 If there is not compliance with either provision of subsection (b)(1), "an existing partnership shall be considered as continuing. . . ." 26 U.S.C. § 708(a).

 In a case very similar to this one, another court held that "even though the partnership dissolved . . . when petitioner withdrew and ceased to be associated with the carrying on of the partnership business, there continued to be a valid partnership until such time as the partnership actually terminated." Fuchs v. Commissioner of Internal Revenue, 80 T.C. 506, 510 (1983). The plaintiff here also withdrew and ceased to be associated with the running of The Pub, the partnership business, but the partnership continued to exist until he sold his interest in 1980.

 Because the partnership did not terminate until 1980, the plaintiff is not entitled to a refund for the taxes paid for 1978 and 1979 on the share of the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.