Bothwell v. Commissioner
United States Board of Tax Appeals
1. The petitioners sold in 1928 shares of stock in a corporation which they had purchased in December 1927, through the exercise of an option to purchase given to them in 1922. Held, that the profits realized by them upon the sale constitute ordinary income and not capital gain. 2. The petitioners' profits from the stock in question were not realized either when they received the option to buy it, when its market value increased, or when they acquired it, but only when they…
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1. The petitioners sold in 1928 shares of stock in a corporation which they had purchased in December 1927, through the exercise of an option to purchase given to them in 1922. Held, that the profits realized by them upon the sale constitute ordinary income and not capital gain. 2. The petitioners' profits from the stock in question were not realized either when they received the option to buy it, when its market value increased, or when they acquired it, but only when they sold it, and the measure of their profits is the difference between its purchase price and the sale price. 3. In their…
1Opinion of the Court
*1355OPINION.
Smith :
The first question presented by these proceedings is whether the profit realized by each petitioner in 1928 upon the sale of shares of stock of the Brazos Oil Corporation is ordinary income taxable at both normal and surtax rates, or capital gain subject only to the 12% per cent tax. The amount of the profit in the case of each petitioner is not in dispute.
Section 111 (a) of the Revenue Act of 1928 provides that “the gain from the sale or other disposition of property shall be the excess of the amount realized therefrom over the basis provided in section 113.” Section 113 (a)…
2Cases cited1 opinion
- Harper v. Bibb & FalknerSupreme Court of Alabama · 1872
3Cited by13 opinions
- Pike v. CommissionerUnited States Tax Court · 1965
- Unvert v. CommissionerUnited States Tax Court · 1979
- Bartel v. CommissionerUnited States Tax Court · 1970
- Molbreak v. CommissionerUnited States Tax Court · 1973
- Crane v. CommissionerUnited States Tax Court · 1966
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