Alstores Realty Corp. v. Commissioner
United States Tax Court
Petitioner acquired a warehouse building offered for sale for $ 1 million, paying $ 750,000 cash and simultaneously granting the party from which it purchased the property a right to 2 1/2 years' rent-free occupancy of specified portions under a leaseback agreement. Held: Petitioner realized taxable rent income in the amount of the fair market value of the leaseback.
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Petitioner acquired a warehouse building offered for sale for $ 1 million, paying $ 750,000 cash and simultaneously granting the party from which it purchased the property a right to 2 1/2 years' rent-free occupancy of specified portions under a leaseback agreement. Held: Petitioner realized taxable rent income in the amount of the fair market value of the leaseback. The transaction was a purchase of the entire fee interest and a leaseback of a portion thereof, and not a purchase of a remainder interest with the seller reserving an estate for years. Held, further, petitioner's depreciable…
1Opinion of the Court
Hoyt, Judge:
Respondent determined a deficiency in income tax against petitioner in the amount of $120,429.60 for petitioner’s taxable year ended January 31,1958. Respondent’s disallowance of a portion of petitioner’s claimed deduction for accrued taxes has not been challenged. Hence, the only issues remaining for decision are: (1) Whether petitioner realized $253,090.75 of rent income as a result of a transaction in which it purchased a warehouse property for $750,000 cash plus a simultaneous agreement to permit the seller to retain occupancy of a portion of the building rent free for 2y2…
2Cases cited5 opinions
- Thomas v. PerkinsSupreme Court of the United States · 1937
- Larkin v. United StatesCourt of Appeals for the Eighth Circuit · 1935
- Pembroke v. CommissionerUnited States Board of Tax Appeals · 1931
- Pembroke v. HelveringCourt of Appeals for the D.C. Circuit · 1934
- Famous Foods, Inc. v. United StatesDistrict Court, W.D. Pennsylvania · 1963
3Cited by16 opinions
- Bb&t Corp. v. United StatesCourt of Appeals for the Fourth Circuit · 2008
- Olin Bryant and Vanell Bryant v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1968
- Bryant v. CommissionerUnited States Tax Court · 1966
- Eller v. CommissionerUnited States Tax Court · 1981
- Hibler v. CommissionerUnited States Tax Court · 1966
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