Shannonhouse v. Commissioner
United States Tax Court
Where taxpayers realized capital gains in 1947 on the sale by warranty deed of income-producing realty, deductions for amounts paid to the purchasers in 1949 in discharge of liabilities for breach of covenants of title to the property are subject to the capital loss provisions of section 117 of the Internal Revenue Code. Arrowsmith v. Commissioner, 344 U.S. 6.
1Opinion of the Court
OPINION.
Ahundell, Judge:
Petitioners sold income-producing real property in 1947 by warranty deed and realized on the sale a capital gain which was duly returned. In 1948 it was discovered that one of the buildings sold encroached on the property of a third person. The purchasers were forced to expend $3,331.50 to relocate the building. Petitioners thereafter in 1949 reimbursed the purchasers in the full amount of their outlay and were thereupon released from any further liability for breach of the covenants of title in the warranty deed.
Petitioners contend that the aggregate of $4,281.50 was…
2Cases cited2 opinions
- Arrowsmith v. CommissionerSupreme Court of the United States · 1952
- Braznell v. CommissionerUnited States Tax Court · 1951
3Cited by3 opinions
- Boothe v. CommissionerUnited States Tax Court · 1984
- Boothe v. CommissionerUnited States Tax Court · 1984
- Shannonhouse v. CommissionerUnited States Tax Court · 1953