Harold Wener v. Commissioner of Internal Revenue, Molly Wener v. Commissioner of Internal Revenue

The facts in the controversy are, in the main, not in dispute.

I.

The Facts in the Controversy

On September 7, 1943, the petitioners (to be referred to as “the taxpayers”), husband and wife, entered into a limited partnership agreement with two other couples, Leon A. and Dorothy Jane Smoller and Alan A. and Margaret M. Joseph (to be referred to as “the remaining partners”), which was to be known as the “Boreva Sportswear Co.” The partnership engaged in the manufacture of women’s sportswear, and was conducted at Chicago, Ill., where it had a sales office and Stoughton, Wis., where it had a manufacturing plant. The husbands became general partners and the wives limited partners.

On September 6, 1946, an agreement was entered into dissolving the partnership as to the taxpayers by allowing their withdrawal from it as of January 31, 1947, the remaining partners being given the option of acquiring the interests of the taxpayers. The agreement contained a formula for determining the full value of the interests of the taxpayers,- — -the determination to be made by a designated certified public accountant. It also obligated Harold Wener and his wife not to engage in the business of…