Bibb v. State Tax Commission

Edward H. Howell, Judge.

Plaintiffs appeal from an income tax deficiency assessment for the tax year 1965.

In 1963 plaintiffs, cash basis taxpayers, sold their orchard in Hood River County for $97,000, receiving a $27,000 down payment with the $70,000 balance secured by a land sale contract providing for installment payments of $7,000 per year plus five percent interest. The contract contained a provision allowing the buyer to skip the principal payments for two years and pay the interest only, with the deferred principal payments to be added to the life of the contract.

The plaintiffs did not…