Kent Industrial Corp. v. Commissioner
United States Tax Court
X corporation, of which petitioner was transferee, was formed in 1945 for the purpose of acquiring title to certain real estate and selling it at a profit after obtaining tenants in the improved portion of the real estate in order to facilitate its sale. In the same year X sold the real estate at a profit and took a purchase money mortgage securing the unpaid portion of the purchase price.
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X corporation, of which petitioner was transferee, was formed in 1945 for the purpose of acquiring title to certain real estate and selling it at a profit after obtaining tenants in the improved portion of the real estate in order to facilitate its sale. In the same year X sold the real estate at a profit and took a purchase money mortgage securing the unpaid portion of the purchase price. No other real estate was acquired or sold by X. Held, the interest on the purchase money bond received by X in 1947 did not constitute "rents" within the meaning of section 502 (g) of the Internal Revenue…
1Opinion of the Court
OPINION.
Kern, Judge:
The narrow question presented by this proceeding is whether the interest payments received by the transferor corporation during the taxable year upon the purchase money bond and mortgage executed in connection with the sale of its real estate in 1945, constitute “rents” under the terms of section 502 (g) of the Internal Revenue Code of 1939, set out in the margin hereof.1 If they do, then “rents” constituted more than 50 per centum of the corporation’s gross income and the corporation would not be subject to tax as a personal holding company. Obviously, a different result…
2Cases cited1 opinion
- Thrift v. CommissionerUnited States Tax Court · 1950
3Cited by5 opinions
- Reilly v. CommissionerUnited States Tax Court · 1955
- Char-Lil Corp. v. CommissionerUnited States Tax Court · 1998
- Kent Industrial Corp. v. CommissionerUnited States Tax Court · 1955
- Parkside, Inc. v. CommissionerUnited States Tax Court · 1975
- Reilly v. CommissionerUnited States Tax Court · 1955