Hewitt Realty Co. v. Commissioner

1. Where, under provisions of a lease for 21 years with three possible renewals for like terms, lessee erected a building of an agreed useful life of 40 years, title to which building, subject to the lease, passed to the lessor immediately on erection, respondent properly determined that the estimated depreciated value of the building at the date of expiration of the original term of the lease represented income to lessor and added an aliquot part to income for the taxable year. 2. Where income to lessor arising from the erection by lessee of a building on the leased land is to be spread over…