William S. Rhodes and Sara G. Rhodes v. United States of America, Spears R. Rhodes and Martha Jane Rhodes v. United States

BOOTLE, District Judge:

These consolidated appeals require us to determine the proper tax treatment of income received by taxpayers under a contract with their wholly owned corporation, Excelsior Brick Company, Inc., disposing of brick clay deposits on a tract of taxpayers’ land. The issue presented is whether the contract was in essence a sale of minerals in place or a mineral lease. If a sale, as contended by taxpayers, the payments they received constituted proceeds from the sale of a capital asset and were taxable as capital gain. If the transaction was a lease agreement, as contended for…