Soelling v. Commissioner
United States Tax Court
Petitioner expended amounts in 1971 for professional fees in connection with the condemnation of property and the rezoning of the remainder of the tract. Held: Such expenditures are capital in nature and, therefore, are not deductible in the year paid, but serve to increase basis. In so holding we overrule our opinion in Madden v. Commissioner, 57 T.C. 513 (1972). Held, further: Apportionment of cost basis is made as of the date of acquisition.
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Petitioner expended amounts in 1971 for professional fees in connection with the condemnation of property and the rezoning of the remainder of the tract. Held: Such expenditures are capital in nature and, therefore, are not deductible in the year paid, but serve to increase basis. In so holding we overrule our opinion in Madden v. Commissioner, 57 T.C. 513 (1972). Held, further: Apportionment of cost basis is made as of the date of acquisition. Such basis is then increased by an allocable portion of the above expenditures.
1Opinion of the Court
Sterrett, Judge:
Respondent, on September 19,1975, issued a statutory notice of deficiency in which he determined a deficiency in petitioners’ Federal income tax for the taxable year ended December 31, 1971, in the amount of $8,720. After concessions by the parties the following two issues remain for our determination: (1) Whether amounts expended for professional fees in connection with condemnation proceeds and attempted rezoning are currently deductible under section 212, I.R.C. 1954, and (2) the apportionment of basis for purposes of calculating the capital gain realized as a result of the…
2Cases cited10 opinions
- United States v. GilmoreSupreme Court of the United States · 1963
- Woodward v. CommissionerSupreme Court of the United States · 1970
- Ayling v. CommissionerUnited States Tax Court · 1959
- Galt v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1954
- Galt v. CommissionerUnited States Tax Court · 1953
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3Cited by19 opinions
- Wagner v. CommissionerUnited States Tax Court · 1982
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- BHA Enterprises, Inc. v. CommissionerUnited States Tax Court · 1980
- H. G. Fenton Material Co. v. CommissionerUnited States Tax Court · 1980
- Von Hafften v. CommissionerUnited States Tax Court · 1981
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