Carlen v. Commissioner
United States Tax Court
Capital Gains and Losses -- Timber Cutting -- Section 117 (k) (1) Internal Revenue Code. -- A partnership in which the taxpayers had an interest entered into contracts for logging timber on lands owned by others. For this service they were to be paid compensation measured by the difference between market price of the timber cut and specified stumpage plus a "service fee."
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Capital Gains and Losses -- Timber Cutting -- Section 117 (k) (1) Internal Revenue Code. -- A partnership in which the taxpayers had an interest entered into contracts for logging timber on lands owned by others. For this service they were to be paid compensation measured by the difference between market price of the timber cut and specified stumpage plus a "service fee." Held, the taxpayers were not entitled to capital-gains treatment on the timber cut under section 117 (k) (1).
1Opinion of the Court
OPINION.
Tietjens, Judge:
The issue for decision is whether the taxpayers may properly treat the cutting of timber under the contracts between the partnership and Neuskah and E. K. Bishop Lumber Company “as a sale or exchange of such timber” as provided in section 117 (k) (1) ,1 See also section 117 (j) (l).2 If so, they were entitled to treat their gains as capital gains.
In summary, the taxpayers’ argument is that they are entitled to the benefits of 117 (k) (1) “either on the basis that [they] purchased the timber and were the owners thereof at all times (subject to the reservation of title…
2Cases cited2 opinions
- Springfield Plywood Corp. v. CommissionerUnited States Tax Court · 1950
- Boeing v. United StatesUnited States Court of Claims · 1951
3Cited by14 opinions
- Cabax Mills v. CommissionerUnited States Tax Court · 1972
- United States v. Pete Johnson, F. Douglas Mavor, Jane Kendle Mavor, Nelson T. Bruce, and Cleo BruceCourt of Appeals for the Ninth Circuit · 1958
- Pinkerton v. CommissionerUnited States Tax Court · 1957
- Carlen v. CommissionerCourt of Appeals for the Ninth Circuit · 1955
- Wirkkala v. United StatesDistrict Court, W.D. Washington · 1960
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