Legal Opinion

Haynsworth v. Commissioner

United States Tax Court

Decided August 22, 1977No. Docket No. 5501-75Published

In 1959, a partnership of which petitioner-husband was a member acquired a piece of land for subdivision purposes, obtained an estimate of the costs of developing it, and began development and sales of lots from the subdivision. The partnership created a reserve account in the amount of the estimated costs and debited that account with development costs actually paid.

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In 1959, a partnership of which petitioner-husband was a member acquired a piece of land for subdivision purposes, obtained an estimate of the costs of developing it, and began development and sales of lots from the subdivision. The partnership created a reserve account in the amount of the estimated costs and debited that account with development costs actually paid. As each lot was sold, the partnership deducted a proportionate part of the land costs as well as a proportionate part of the estimated development costs from the selling price in computing the gross profit from the sale. By Nov.…

1Opinion of the Court

Robert F. and Hazel Haynsworth, Petitioners v. Commissioner of Internal Revenue, Respondent

Haynsworth v. Commissioner

Docket No. 5501-75

United States Tax Court

68 T.C. 703; 1977 U.S. Tax Ct. LEXIS 67;

August 22, 1977, Filed

Decision will be entered for the respondent.

In 1959, a partnership of which petitioner-husband was a member acquired a piece of land for subdivision purposes, obtained an estimate of the costs of developing it, and began development and sales of lots from the subdivision. The partnership created a reserve account in the amount of the estimated costs and debited that account…

2Cases cited25 opinions

  1. Colony, Inc. v. CommissionerSupreme Court of the United States · 1958
  2. Colony, Inc. v. CommissionerUnited States Tax Court · 1956
  3. Mayfair Minerals, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1972
  4. Schuster's Express, Inc. v. CommissionerUnited States Tax Court · 1976
  5. The Colony, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1957

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