The Court of Appeals for the Third Circuit presented two similar cases in which both taxpayers did not report money received for punitive damages and treble damages as gross income.
1.- In Commisioner of Internal Revenue vs Glenshaw Glass Company, Glenshaw, a manufacturer of glass bottles and containers legally disputed against Hartford Empire Company which manufactured machinery used by Glenshaw. Among the claims set by Glenshaw were demands for exemplary damages for fraud and treble damages for injuring its business due to violations of antitrust law by Hartford Empire. Eventually, Hartford paid Glenshaw $800,000 out of which $324,529.94 were presented as punitive damages and as consequence were not reported as income for the tax year involved. …show more content…
for violating the federal antitrust laws and sought treble damages. William Goldman suffered a loss in profits equal to $125,000 and was entitled to treble damages for sum of $375,000. Goldman only reported as gross income the recovery amount of $125,000 and alleged that the remaining $250,000 represented the punitive
1.- In Commisioner of Internal Revenue vs Glenshaw Glass Company, Glenshaw, a manufacturer of glass bottles and containers legally disputed against Hartford Empire Company which manufactured machinery used by Glenshaw. Among the claims set by Glenshaw were demands for exemplary damages for fraud and treble damages for injuring its business due to violations of antitrust law by Hartford Empire. Eventually, Hartford paid Glenshaw $800,000 out of which $324,529.94 were presented as punitive damages and as consequence were not reported as income for the tax year involved. …show more content…
for violating the federal antitrust laws and sought treble damages. William Goldman suffered a loss in profits equal to $125,000 and was entitled to treble damages for sum of $375,000. Goldman only reported as gross income the recovery amount of $125,000 and alleged that the remaining $250,000 represented the punitive