McCue Bros. & Drummond, Inc. v. Commissioner
United States Tax Court
During the taxable year petitioner occupied business premises under a lease which expired January 31, 1946, and continued in possession as a statutory tenant under the New York emergency rent control laws. Thereafter, petitioner's landlord paid petitioner $ 22,500 to vacate and surrender the premises. Respondent determined that the $ 22,500 constituted ordinary income.
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During the taxable year petitioner occupied business premises under a lease which expired January 31, 1946, and continued in possession as a statutory tenant under the New York emergency rent control laws. Thereafter, petitioner's landlord paid petitioner $ 22,500 to vacate and surrender the premises. Respondent determined that the $ 22,500 constituted ordinary income. Held, petitioner sold a property right, which was a capital asset, and the amount realized therefrom constituted a capital gain.
1Opinion of the Court
OPINION.
Rice, Judge:
Respondent determined deficiencies in income and excess profits taxes for the taxable year ended October 31,1946, in the respective amounts of $1,820.91 and $3,361.68. The only issue is whether the sum of $22,500 received by petitioner from Jamlee Hotel Corporation was taxable as ordinary income or as capital gain.
The facts were stipulated. The stipulated facts are so found and are incorporated herein by reference.
Petitioner was incorporated under the laws of New York in 1923. It was engaged in the business of retailing men’s hats. For the taxable year ended October…
2Cases cited7 opinions
- Stern v. . Equitable Trust Co.New York Court of Appeals · 1924
- Wasservogel v. MeyerowitzNew York Court of Appeals · 1949
- Commissioner of Internal Revenue v. Golonsky. Commissioner of Internal Revenue v. GoldCourt of Appeals for the Third Circuit · 1952
- Jones, Collector of Internal Revenue v. CorbynCourt of Appeals for the Tenth Circuit · 1950
- Twentieth Century Associates, Inc. v. WaldmanNew York Court of Appeals · 1945
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3Cited by39 opinions
- Commissioner of Internal Revenue v. McCue Bros. & Drummond, IncCourt of Appeals for the Second Circuit · 1954
- Leh v. CommissionerUnited States Tax Court · 1957
- Kingsbury v. CommissionerUnited States Tax Court · 1976
- Hollywood Baseball Ass'n v. CommissionerUnited States Tax Court · 1964
- Pittston Co. v. CommissionerUnited States Tax Court · 1956
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