Ted Mosby is a professor at Columbia University where he teaches architecture. Although Ted enjoys his job, the administration at Columbia University and him do not get along. The administration is sick and tired of Teds business venture, Puzzles Bar and Grill, taking up all of his time outside of class. Since the administration wants Ted gone, they offer him a $300,000 payment to Ted and, in return, Ted would relinquish his tenure and resign. Ted decides to take them up on their offer and accepts the $300,000 payment.

Marshall Erickson, Teds lawyer friend, advised him that tenure is a long-term capital asset and Ted should recognize a long-term capital gain on the $300,000 payment for tax purposes. Marshall is an environmental lawyer at the National Resource Defense Council and knows little about tax law though. Also, Barney Stinson, Teds business executive friend, is convinced the $300,000 payment should be ordinary income because Teds employer is paying him. Barney and Marshall get into a heated argument and the argument results in a slap-bet between Marshall and Barney on who is right about the character of the $300,000 payment for tax purposes.

A. RULE OF LAW: A review of the tax authorities

Legislative Authority- The Internal Revenue Code (IRC)

Administrative Authority- Regulations, Revenue Rulings

Judicial Authority-Court Cases

B. Select at least one case from your Rule of Law section and look it up in the Citator. Give a brief summary of what has happened to the case since it was rendered. What was the original court of jurisdiction? Was it appealed? Have other cases made reference to the case. If so, were the references favorable or unfavorable?