Trustee Corp. v. Commissioner
United States Tax Court
The petitioner paid its lessee $ 200,000 to obtain a cancellation of a lease which had a remaining term of 8 1/4 years, and then entered into a new lease with another party for a 20-year term at a substantial increase in rental. Had the existing lease not been canceled, the transaction would have taken the form of a sublease by the lessee for 8 1/4 years and a simultaneous lease by petitioner for a term of 11 3/4 years to take effect at the end of the 8 1/4-year period.
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The petitioner paid its lessee $ 200,000 to obtain a cancellation of a lease which had a remaining term of 8 1/4 years, and then entered into a new lease with another party for a 20-year term at a substantial increase in rental. Had the existing lease not been canceled, the transaction would have taken the form of a sublease by the lessee for 8 1/4 years and a simultaneous lease by petitioner for a term of 11 3/4 years to take effect at the end of the 8 1/4-year period. Held, that the $ 200,000 payment made by the petitioner was not made in order to obtain the benefit of the new lease for the…
1Opinion of the Court
AteiNS, Judge:
The respondent determined deficiencies in income tax against the petitioner for the taxable years ended May 31, 1956, and May 31,1957, in the respective amounts of $1,471.69 and $5,025.28.
The sole issue presented is whether the amount paid by the petitioner to its lessee to obtain cancellation of the lease is properly amortizable over the term of a new lease entered into with a different tenant for a substantially longer term or over the unexpired term of the canceled lease.
FINDINGS OF FACT
Some of the facts are stipulated and are incorporated herein by this reference.
The…
2Cases cited6 opinions
- Miller v. CommissionerUnited States Board of Tax Appeals · 1928
- Heller Trust v. CommissionerUnited States Tax Court · 1946
- Business Real Estate Trust v. CommissionerUnited States Board of Tax Appeals · 1932
- Wells Fargo Bank & Union Trust Co. v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1947
- Rosenblatt v. CommissionerUnited States Tax Court · 1947
1 more not listed; retrieve them via the Exa API.
3Cited by14 opinions
- Houston Chronicle Publishing Company, Plaintiff-Appellee-Cross v. United States of America, Defendant-Appellant-CrossCourt of Appeals for the Fifth Circuit · 1973
- Triangle Publications, Inc. v. CommissionerUnited States Tax Court · 1970
- Montgomery Co. v. CommissionerUnited States Tax Court · 1970
- Rodeway Inns of America v. CommissionerUnited States Tax Court · 1974
- Peerless Weighing & Vending Machine Corp. v. CommissionerUnited States Tax Court · 1969
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