Thrift v. Commissioner
United States Tax Court
Activities incident to the sale of a tract of land which petitioner subdivided and improved in order to promote its sale to a group of six contractors, held not to constitute the carrying on of a trade or business, and therefore the lots sold to the contractors during the taxable year were not held primarily for sale to customers in the ordinary course of the petitioner's trade or business and the profits from such sales were taxable as capital gains rather than ordinary…
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Activities incident to the sale of a tract of land which petitioner subdivided and improved in order to promote its sale to a group of six contractors, held not to constitute the carrying on of a trade or business, and therefore the lots sold to the contractors during the taxable year were not held primarily for sale to customers in the ordinary course of the petitioner's trade or business and the profits from such sales were taxable as capital gains rather than ordinary income. Held further, that where a demand promissory note was received for the full purchase price of a block of lots sold…
1Opinion of the Court
OPINION.
Arundell, Judge:
Whether property at the time of sale constitutes a capital asset held by the taxpayer as an investment or property held primarily for sale to customers in the ordinary course of his trade or business is wholly a question of fact. However, in the course of deciding the many cases posing this question, the Courts have adopted a number of well recognized tests. The governing considerations have been the purpose or reason for the taxpayer’s acquisition of the property and in disposing of it, the continuity of sales or sales related activity over a period of time; the…
2Cases cited3 opinions
- Pacific National Co. v. WelchSupreme Court of the United States · 1938
- Boomhower v. United StatesDistrict Court, N.D. Iowa · 1947
- United States v. KaplanSupreme Court of the United States · 1938
3Cited by160 opinions
- Pritchett v. CommissionerUnited States Tax Court · 1974
- Hicks Co. v. CommissionerUnited States Tax Court · 1971
- Reaver v. CommissionerUnited States Tax Court · 1964
- Greenspon v. CommissionerUnited States Tax Court · 1954
- Rockwell v. CommissionerUnited States Tax Court · 1972
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