W. Harley Huxford and Rae Huxford v. United States of America, Walter D. Taylor and Carolyn H. Taylor v. United States

AINSWORTH, Circuit Judge:

The question on appeal is whether the gains from the sale of certain timber by the J. O. Huxford Estate, Inc., a Subchapter S corporation, constitute capital gains or ordinary income for federal income tax purposes. The jury found that at the time of the sale the corporation held the timber primarily for sale to customers in the ordinary course of its trade or business. Accordingly, the trial judge entered judgment for the United States on the capital gains issue. See Int.Rev.Code of 1954, § 1221 (1). The plaintiffs-appellants, two of the corporation’s four…