Morphy v. Commissioner
United States Board of Tax Appeals
Where a building is erected on leased premises by lessee under optional provision in the lease and is not subject to removal on termination of the lease, held, the aliquot part of the depreciated valud of the building, at the expiration of the lease, is taxable income to the lessor for a year prior to that expiration. Regulations 74, article 63, followed.
1Opinion of the Court
*290OPINION.
Leech :
The broad question here is when is income realized to the lessor from the erection of a building on his land by the lessee, which is not subject to removal on termination of the lease. The Treasury *291regulations1 provide that the income must be reported either in the year of completion of the building or prorated over the life of the lease. The respondent has determined a deficiency on the latter basis. The petitioner claims that the regulation is invalid and that income is not realized until the property is sold or the lease is forfeited or expires.
These regulations under attack…
2Cases cited2 opinions
- Miller v. GearinCourt of Appeals for the Ninth Circuit · 1919
- Cryan v. WardellDistrict Court, N.D. California · 1920
3Cited by9 opinions
- English v. BitgoodDistrict Court, D. Connecticut · 1938
- Hilgenberg v. United StatesDistrict Court, D. Maryland · 1937
- Commissioner v. WoodCourt of Appeals for the Seventh Circuit · 1939
- Cleveland Trust Co. v. CommissionerUnited States Board of Tax Appeals · 1939
- Durkheimer Inv. Co. v. CommissionerUnited States Board of Tax Appeals · 1937
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