Hoopengarner v. Commissioner
United States Tax Court
In April of 1976, petitioner acquired a leasehold interest in a parcel of undeveloped land. The lease, which ran for 52 1/2 years at the time of acquisition, required petitioner to construct and operate an office building on the leased premises. During 1976, petitioner made rental payments pursuant to the lease.
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In April of 1976, petitioner acquired a leasehold interest in a parcel of undeveloped land. The lease, which ran for 52 1/2 years at the time of acquisition, required petitioner to construct and operate an office building on the leased premises. During 1976, petitioner made rental payments pursuant to the lease. Construction of the building was completed in September of 1977. Held, the 1976 rental payments are not deductible pursuant to sec. 162, I.R.C. 1954, since petitioner was not carrying on a trade or business at the time they were made. Held, further, part of the rental payments are…
1DissentCohen, Judge
I respectfully dissent from the opinion of the majority insofar as it allows the taxpayer to circumvent the pre-opening expense rules that the majority acknowledges apply to a trade or business.
There is no doubt that the taxpayer, here, intended to engage in the trade or business of operating an office building, and that he was utilizing the land subject to the ground lease for the purpose of constructing such a building. Indeed, most of his brief is devoted to the argument that he was engaged in that trade or business during the taxable year. He argues, and I agree, that operation of a…
2Cases cited14 opinions
- Trust Under the Will of Bingham v. CommissionerSupreme Court of the United States · 1945
- Commissioner v. Idaho Power Co.Supreme Court of the United States · 1974
- Frank v. CommissionerUnited States Tax Court · 1953
- Madison Gas and Electric Company v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1980
- Madison Gas & Electric Co. v. CommissionerUnited States Tax Court · 1979
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