Harry Trotz and Camille Trotz v. Commissioner of Internal Revenue

BREITENSTEIN, Circuit Judge.

Petitioners, husband and wife, seek review of a Tax Court decision 1 affirming the Commissioner’s assessment of an income tax deficiency for the tax years 1958 and 1959. The issue is whether a gain on an instalment sale of depreciable property by taxpayer to Trotz Construction, Inc., is taxable as a long-term capital gain. Section 1239 of the Internal Revenue Code of 19542 provides that gain on the sale of depreciable property by an individual to a corporation “more than 80 percent in value of the outstanding stock of which is owned by such individual, his spouse,…