Brief Fact Summary. Raytheon, Taxpayer, alleged that the illegal conduct of R.C.A. in violation of anti-trust acts destroyed the profitable interstate and foreign commerce of Raytheon and cause in excess of $3 million in damage.
Synopsis of Rule of Law. Damages recovered for violations of anti-trust acts are treated as income when they represent compensation for loss of profits.
Issue. Is the settlement required to be included in Taxpayer’s gross income?
Held. Circuit Judge Mahoney issued the opinion for the United States First Circuit Court of Appeals in holding that the compensation for Taxpayer’s loss of good will in excess of its cost is gross income.
The key question is: in lieu of what were the damages awarded?.View Full Point of Law