Willow Terrace Dev. Co. v. Commissioner
United States Tax Court
Building Co., engaged in selling new houses, accepted 151 houses as trade-ins and gave to purchasers of new houses trade-in allowances equal to their equities in the houses traded in. Building Co. treated the trade-in allowances as a part of the downpayment on the new houses. Building Co. found it necessary to construct water and sewerage systems at a cost of $ 157,187.49 to service the improved lots in its subdivision.
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Building Co., engaged in selling new houses, accepted 151 houses as trade-ins and gave to purchasers of new houses trade-in allowances equal to their equities in the houses traded in. Building Co. treated the trade-in allowances as a part of the downpayment on the new houses. Building Co. found it necessary to construct water and sewerage systems at a cost of $ 157,187.49 to service the improved lots in its subdivision. To meet FHA requirements, Building Co. conveyed the utilities systems to an operating company which, in turn, executed trust deeds giving the lot owners an equitable interest…
1Opinion of the Court
Mulroney, Judge:
The respondent determined deficiencies in the petitioners’ income tax as follows:
Fiscal year ended April SO— Deficiency
1955 _ $9,971.63
1956 _ 99,739. 78
1957 _ 114, 663.30
1958 _ 33, 869.41
The issues are (1) whether the cost of water and sewer facilities constructed by petitioners to service their real estate subdivision is includable in the basis of the lots in the subdivision, or, in the alternative, whether the transfer of the water and sewer facilities by Post Oak Manor Building Co., Inc., to the Post Oak Manor Water Co., Inc., constituted a sale in which a loss was incurred…
2Cases cited4 opinions
- Colony, Inc. v. CommissionerSupreme Court of the United States · 1958
- Colony, Inc. v. CommissionerUnited States Tax Court · 1956
- The Colony, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1957
- Forbes v. City of HoustonCourt of Appeals of Texas · 1957
3Cited by19 opinions
- Norwest Corp. v. Comm'rUnited States Tax Court · 1998
- Herzog Bldg. Corp. v. CommissionerUnited States Tax Court · 1965
- Derby Heights, Inc. v. CommissionerUnited States Tax Court · 1967
- Willow Terrace Development Co. v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1965
- Ferrell v. CommissionerUnited States Tax Court · 1987
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