Bruce G. Murphy, Lou A. Murphy v. Commissioner of Internal Revenue, Joseph L. Lyle, Jr., Barbara S. Lyle v. Commissioner of Internal Revenue

The issue in these consolidated cases is whether a purchase and sale of undivided interests in Portugal Wines, Ltd. (which did not exist) represent a purchase and sale of capital assets entitled to capital gains tax treatment under § 1221. Internal Revenue Code of 1954, 26 U.S.C., in the Federal income tax returns of the appellants (taxpayers) for the years 1972 and 1973. 1 Jurisdiction for the actions is based on § 7482, Internal Revenue Code of 1954. The Tax Court found that the transactions did not qualify for capital gains tax treatment and that the appellants were liable for deficiencies…