United States v. Raymond H. Witte and Lillian B. Witte

JOHN R. BROWN, Circuit Judge.

The question here is whether proceeds generated by the transfer of sand and gravel leases constituted capital gain or ordinary income subject to depletion under the 1939 Code [section 117 et seq., 26 U.S.C.A. § 117 et seq.]. As tried below and argued generally here, this turned ostensibly on whether the transfer amounted to an outright sale, or whether it had some lesser status analogous to a lease or sublease so that the transferor is deemed to have an economic interest in all or a part of the thing transferred. This approach of a lease, which we regard as…