Warren Jones Co. v. Commissioner
United States Tax Court
Petitioner, a cash basis taxpayer, sold an apartment building in 1968 for a total price of $ 153,000, receiving a downpayment of $ 20,000 and the contractual right to receive $ 1,000 per month plus 8-percent interest. The remaining balance was to be paid at the end of 15 years. During 1968 petitioner received $ 24,000, which included the downpayment, with $ 20,457.84 allocable to principal.
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Petitioner, a cash basis taxpayer, sold an apartment building in 1968 for a total price of $ 153,000, receiving a downpayment of $ 20,000 and the contractual right to receive $ 1,000 per month plus 8-percent interest. The remaining balance was to be paid at the end of 15 years. During 1968 petitioner received $ 24,000, which included the downpayment, with $ 20,457.84 allocable to principal. Its basis in the property at the time of sale was $ 61,913.34. On its Federal income tax return for 1968 petitioner did not report any gain from the sale, but elected, in the alternative, to use the…
1DissentTannenwald, J.
I would normally abjure disagreeing with the trier of the facts in a case such as this, where the issue involved is essentially factual. See Wingate E. Underhill, 45 T.C. 489 (1966). But the majority herein has put its stamp of approval on the decision of the trier of the facts by articulating a rationale which extends the “open transaction” doctrine of Burnet v. Logan, 283 U.S. 404 (1931), to a situation where the property received by the taxpayer not only had a fair market value but was also marketable, albeit at a discount.1 In my opinion, such an extension is totally unwarranted on the…
2Cases cited11 opinions
- Burnet v. LoganSupreme Court of the United States · 1931
- Johnston v. CommissionerUnited States Tax Court · 1950
- Underhill v. CommissionerUnited States Tax Court · 1966
- Western Oaks Bldg. Corp. v. CommissionerUnited States Tax Court · 1968
- Cowden v. CommissionerCourt of Appeals for the Fifth Circuit · 1961
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