Crowley, Milner & Co. v. Commissioner
United States Tax Court
Petitioner entered into an arrangement with Prudential Insurance Co. of America whereby petitioner sold a store that it was constructing to Prudential at the store's fair market value and then leased the store from Prudential for 30 years at a fair market rental. Held, the transaction was a bona fide sale rather than a like-kind exchange under sec. 1031, I.R.C. 1954, and petitioner's loss on the sale is recognizable.
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Petitioner entered into an arrangement with Prudential Insurance Co. of America whereby petitioner sold a store that it was constructing to Prudential at the store's fair market value and then leased the store from Prudential for 30 years at a fair market rental. Held, the transaction was a bona fide sale rather than a like-kind exchange under sec. 1031, I.R.C. 1954, and petitioner's loss on the sale is recognizable. Leslie Co. v. Commissioner, 539 F.2d 943 (3d Cir. 1976), affg. 64 T.C. 247 (1975), followed. Held, further, petitioner's excess basis in the property over the sales price is not…
1Opinion of the Court
Featherston, Judge:
Respondent determined a deficiency in the amount of $159,724.57 and an addition to tax under section 6651(a)1 in the amount of $919.61 for the tax year ended January 31,1976. The issues for decision are:(1) Whether section 1031 applies to a sale-leaseback entered into by petitioner and Prudential Insurance Co. of America;(2) Whether the loss incurred by petitioner on the transaction should be capitalized as a cost of obtaining the lease and amortized over the term of the lease; and(3) Whether petitioner is liable for the late filing penalty under section 6651(a).
FINDINGS OF…
2Cases cited8 opinions
- Biggs v. CommissionerUnited States Tax Court · 1978
- Century Electric Co. v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1951
- Franklin B. Biggs v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1980
- Koch v. CommissionerUnited States Tax Court · 1978
- Jordan Marsh Company v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1959
3 more not listed; retrieve them via the Exa API.
3Cited by5 opinions
- Crowley, Milner & Company, a Michigan Corporation v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1982
- Babin v. CommissionerUnited States Tax Court · 1992
- Crowley, Milner & Co. v. CommissionerUnited States Tax Court · 1981
- Stovall v. CommissionerUnited States Tax Court · 1983
- Wagner v. CommissionerUnited States Tax Court · 1987