Klein v. Commissioner
United States Tax Court
During the period 1935 to 1944 petitioner acquired by purchase various mortgage pool participations, mortgage participations and mortgage certificates which were in the process of liquidation. In the taxable year 1944 petitioner received various payments thereon, and on his income tax return treated the amounts received in excess of his cost as long-term capital gains. The respondent determined the gains to be taxable as ordinary income.
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During the period 1935 to 1944 petitioner acquired by purchase various mortgage pool participations, mortgage participations and mortgage certificates which were in the process of liquidation. In the taxable year 1944 petitioner received various payments thereon, and on his income tax return treated the amounts received in excess of his cost as long-term capital gains. The respondent determined the gains to be taxable as ordinary income. Held: (1) Petitioner was not a dealer in mortgage pool participations, mortgage participations, and/or mortgage certificates. (2) The mortgage pool…
1Opinion of the Court
OPINION.
Leech, Judge:
The primary question presented is whether all or any part of the profit realized by the petitioner in the taxable year 1944 with respect to the various mortgage participations is taxable as ordinary income or capital gain. The respondent contends that these participations- constituted stock in trade or property held primarily for sale to customers in the ordinary course of petitioner’s trade or business and therefore were not capital assets as defined in section 117 (a) (1) of the Internal Revenue Code. Whether petitioner was a dealer or an investor as to the…
2Cases cited4 opinions
- Helvering v. William Flaccus Oak Leather Co.Supreme Court of the United States · 1941
- Caulkins v. CommissionerUnited States Tax Court · 1943
- Cumberland County v. Lemoyne Trust Co.Supreme Court of Pennsylvania · 1935
- Avery v. CommissionerUnited States Tax Court · 1949
3Cited by4 opinions
- Rosen v. United StatesDistrict Court, W.D. Pennsylvania · 1960
- Landau v. CommissionerUnited States Tax Court · 1954
- Klein v. CommissionerUnited States Tax Court · 1950
- Landau v. CommissionerUnited States Tax Court · 1954