Professional Equities v. Commissioner
United States Tax Court
Petitioner sells land taking wraparound installment obligations as at least a part of the sales price. For many years, the method of taxing gain in wraparound installment sales in accordance with sec. 453, I.R.C. 1954, has been judicially established in a line of cases headed by Stonecrest Corp. v. Commissioner, 24 T.C. 659 (1955), which interpreted the governing regulations.
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Petitioner sells land taking wraparound installment obligations as at least a part of the sales price. For many years, the method of taxing gain in wraparound installment sales in accordance with sec. 453, I.R.C. 1954, has been judicially established in a line of cases headed by Stonecrest Corp. v. Commissioner, 24 T.C. 659 (1955), which interpreted the governing regulations. Congress made extensive changes to sec. 453 in the Installment Sales Revision Act of 1980, and although the congressional committees indicated pointedly their awareness of Stonecrest, no changes were made in the critical…
1Opinion of the Court
OPINION
Raum, Judge:
The Commissioner determined a deficiency in petitioner’s fiscal 1981 income tax in the amount of $28,540. At issue is the proper amount of gain to be recognized in petitioner’s 1981 tax year on its installment sales of land in which “wraparound mortgages” are taken as part of the payment price.
The parties agree that the governing statutory provisions are in section 453(c) of the Code. That section provides that the income recognized in any taxable year is “that proportion of the payments received in that year which the gross profit (realized or to be realized when payment…
2Cases cited15 opinions
- Commissioner v. South Texas Lumber Co.Supreme Court of the United States · 1948
- National Muffler Dealers Assn., Inc. v. United StatesSupreme Court of the United States · 1979
- Burnet v. S. & L. Building Corp.Supreme Court of the United States · 1933
- Stonecrest Corp. v. CommissionerUnited States Tax Court · 1955
- Republic Petroleum Corp. v. United StatesCourt of Appeals for the Fifth Circuit · 1980
10 more not listed; retrieve them via the Exa API.
3Cited by14 opinions
- Swallows Holding, Ltd. v. Comm'rUnited States Tax Court · 2006
- Tutor-Saliba Corp. v. CommissionerUnited States Tax Court · 2000
- Casebeer v. CommissionerUnited States Tax Court · 1987
- Kingstowne L.P. v. CommissionerUnited States Tax Court · 1994
- Douglas v. CommissionerUnited States Tax Court · 1989
9 more not listed; retrieve them via the Exa API.