United States v. Shelby Langston

TUTTLE, Chief Judge.

The United States appeals from a judgment entered by the district court without a jury granting the appellee a refund of federal income taxes. The sole issue before the trial court, and thus the sole issue before us, is whether when there is a flat sale of bonds together with accrued interest thereon, which interest accrued after the seller acquired the bonds, that part of the flat sale price which is attributable to such accrued interest must be treated by a cash basis-taxpayer as a realization of accrued interest and be taxed to the seller as ordinary income rather than…