John and Betty MacGuire v. Commissioner of Internal Revenue

*1240MORGAN, Circuit Judge:

On their joint federal income tax returns for 1961, taxpayers John and Betty MacGuire reported a long-term capital gain of $700,000 on a claimed disposition of stock in a Mexican corporation, Cia. Ganadera Sahuarito, S.A. (hereinafter Sahuarito). By a notice of deficiency dated August 6, 1965, the Commissioner determined that the $700,000 should be taxed as ordinary income, and that there was a deficiency in the taxpayers’ return of $436,521.74. Taxpayers sued in the United States Tax Court to set aside the ruling of the Commissioner. The Tax Court sustained the…