Leh v. Commissioner
United States Tax Court
In 1948 a partnership entered into a contract which gave it the right to purchase from a corporation 2,250,000 gallons of gasoline per month. In 1950, when gasoline was in short supply, the corporation paid the partnership the amount of $ 183,330.50 to cancel and terminate the contract. Held, the respondent correctly determined that the gain resulting from this transaction was taxable as ordinary income and not as capital gain.
1Opinion of the Court
OPINION.
Rattm, Judge:
Section 117 (j) of the Internal Revenue Code of 1939 1 accords capital gains treatment to gains from the sale or exchange of certain “property used in the trade or business” of a taxpayer. Petitioners contend that the right to purchase 2,250,000 gallons of gasoline per month, which Progress acquired from Olympic under the Progress-Olympic contract, was “property used in the trade or business” of Progress; that the transaction of July 26, 1950, constituted a “sale or exchange” of this property; and that gain of $183,330.50 realized was taxable as capital gain and not as…
2Cases cited9 opinions
- Commissioner of Internal Revenue v. Golonsky. Commissioner of Internal Revenue v. GoldCourt of Appeals for the Third Circuit · 1952
- Commissioner of Internal Revenue v. Starr Bros., IncCourt of Appeals for the Second Circuit · 1953
- General Artists Corp. v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1953
- Commissioner of Internal Revenue v. RayCourt of Appeals for the Fifth Circuit · 1954
- Golonsky v. CommissionerUnited States Tax Court · 1951
4 more not listed; retrieve them via the Exa API.
3Cited by37 opinions
- Luna v. CommissionerUnited States Tax Court · 1964
- Estate of Scharf v. CommissionerUnited States Tax Court · 1962
- Commissioner of Internal Revenue v. The Pittston CompanyCourt of Appeals for the Second Circuit · 1958
- Kingsbury v. CommissionerUnited States Tax Court · 1976
- Aitken v. CommissionerUnited States Tax Court · 1960
32 more not listed; retrieve them via the Exa API.