Howell v. Commissioner
United States Tax Court
Three individuals decided to acquire property as an investment. They formed a corporation in 1961 and caused it to purchase the land. The corporation had no other assets and received no income from the property. It filed an election in 1964 under sec. 1372, I.R.C. 1954, to be taxed as a small business corporation.
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Three individuals decided to acquire property as an investment. They formed a corporation in 1961 and caused it to purchase the land. The corporation had no other assets and received no income from the property. It filed an election in 1964 under sec. 1372, I.R.C. 1954, to be taxed as a small business corporation. In 1964, 1965, and 1966 the corporation sold the property in three transactions, with the first two being merely incidental to the final sale which disposed of over 90 percent of the tract of land. Held, (1) the fact that the corporation's only activity was the sale of the land does…
1Opinion of the Court
Steeeett, Judge:
Respondent determined deficiencies in petitioners’ income taxes for the years and in the amounts as follows:
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The issues for decision are:(1) Whether certain real property, which constituted the only property held by Hectare, Inc., and was sold by it during 1964, 1965, and 1966, was a capital asset within the meaning of section 1221,I.R.C. 1954,2 or whether such property was held by the corporation primarily for sale to customers in the ordinary course of the corporate trade or business.(2) Whether Hectare, Inc., was entitled to the small business corporation…
2Cases cited16 opinions
- Moline Properties, Inc. v. CommissionerSupreme Court of the United States · 1943
- Corn Products Refining Co. v. CommissionerSupreme Court of the United States · 1956
- Malat v. RiddellSupreme Court of the United States · 1966
- Commissioner v. Gillette Motor Transport, Inc.Supreme Court of the United States · 1960
- Thrift v. CommissionerUnited States Tax Court · 1950
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3Cited by57 opinions
- McManus v. CommissionerUnited States Tax Court · 1975
- Bresler v. CommissionerUnited States Tax Court · 1975
- Buono v. CommissionerUnited States Tax Court · 1980
- Cottle v. CommissionerUnited States Tax Court · 1987
- Westchester Dev. Co. v. CommissionerUnited States Tax Court · 1974
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