Christine L. Pounds as Independent of the Estate of Horace E. Pounds and Christine L. Pounds v. United States

WISDOM, Circuit Judge:

The Court is asked to decide whether the amount a real estate broker realized upon the division of profits from a sale of land should be treated as capital gain or as ordinary income where the broker-taxpayer’s right to share in the profits was based on contract rights in part received for services rendered and in part purchased by the taxpayer.

The trial below was to the district court without a jury. Most of the facts are stipulated. The taxpayer, Horace Pounds, 1 now deceased, was a real estate broker and expert appraiser in Houston, Texas. During the year 1954, the…