Nash v. Commissioner
United States Tax Court
Petitioner was in the business of building and selling apartment buildings. His modus operandi was to buy old houses, demolish them, and construct in their place multifamily dwellings. Held: The property at 4619 Wakeley Street was acquired with the intent to demolish and therefore petitioner is not entitled to a loss deduction. The cost basis of the property is allocable solely to the land.
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Petitioner was in the business of building and selling apartment buildings. His modus operandi was to buy old houses, demolish them, and construct in their place multifamily dwellings. Held: The property at 4619 Wakeley Street was acquired with the intent to demolish and therefore petitioner is not entitled to a loss deduction. The cost basis of the property is allocable solely to the land. Held, further: The gain recognized on the sale of 4620 Wakeley Street is taxable at ordinary-income rates. The building was not a sec. 1231 asset, but rather was held primarily for sale in the ordinary…
1Opinion of the Court
Sterrett, Judge:
Tbe Commissioner determined deficiencies in the petitioners’ Federal income tax as follows:
Taxable year Amount
1966 -$3, 867. 06
1967 - 4, 952.23
1968 - 2,883.48
Due to petitioners’ concession, the issues remaining for adjudication are:(1) Whether the petitioners are entitled to claim, on their 1966 Federal income tax return, a loss of $6,425 as a result of the demolition of a house acquired by them in June 1966 and razed in December of the same year.(2) Whether the gain of $13,718.80 realized by petitioners on the sale of an apartment building in 1967 is taxable as ordinary…
2Cases cited20 opinions
- Corn Products Refining Co. v. CommissionerSupreme Court of the United States · 1956
- Malat v. RiddellSupreme Court of the United States · 1966
- Commissioner v. Gillette Motor Transport, Inc.Supreme Court of the United States · 1960
- Chesbro v. CommissionerUnited States Tax Court · 1953
- Jones v. CommissionerUnited States Tax Court · 1956
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3Cited by22 opinions
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- Alisobhani v. CommissionerUnited States Tax Court · 1994
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