Calvin P. Applegate and Irma Applegate v. Commissioner of Internal Revenue

FAIRCHILD, Senior Circuit Judge.

The Commissioner of Internal Revenue determined a deficiency in income taxes for 1984, and timely mailed a notice of deficiency to the taxpayers, Irma and Calvin Apple-gate. The Applegates filed a petition with the Tax Court seeking a redetermination of the deficiency. The Tax Court held that the taxpayers’ “price later” contracts, formed in 1984, qualified for installment sales treatment under 26 U.S.C. § 453, as argued by the taxpayers. The Tax Court, however, disagreed with the taxpayers as to the characterization of the cash payments received upon execution…