Commissioner of Internal Revenue v. Tri-S Corporation

PHILLIPS, Circuit Judge.

At the times here material, Tri-S Corporation, hereinafter called the taxpayer, was a Colorado corporation. On October 10, 1960, the taxpayer purchased 80 acres of raw and wholly unimproved land for $167,750. On October 6, 1961, it transferred about 20 acres of such land 1 to the State of Colorado for $130,-000.

In its income tax return for its taxable year, ended October 31, 1961, the taxpayer reported the income from such sale as a capital gain. 2 The Commissioner of Internal Revenue decided it was ordinary income and assessed a deficiency.

On petition for review, the…