Asmussen v. United States

MEMORANDUM OPINION

DONALD J. PORTER, District Judge.

W.J. and Alice Asmussen, plaintiff taxpayers, seek to recover $43,368.65 plus interest paid as federal income tax for calendar year 1976. The central issue in this action is whether a gain recognized by the taxpayers on the sale of rye in 1976 is long-term capital gain or ordinary income. The rye was originally produced by taxpayers on their South Dakota grain farm, then pledged to the Commodity Credit Corporation (CCC) as security for a loan, and later redeemed. Although Section 1221 of the IRC would generally preclude capital gains…