Morrison v. Commissioner
United States Tax Court
A taxpayer, having elected to report gains from sales of lots on the installment basis, repossessed certain lots after default by the purchaser. By the sale contract's terms the taxpayer retained title for delivery, when all price installments should be paid; default rendered the contract null and void, and released the purchaser from further liability for payment.
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A taxpayer, having elected to report gains from sales of lots on the installment basis, repossessed certain lots after default by the purchaser. By the sale contract's terms the taxpayer retained title for delivery, when all price installments should be paid; default rendered the contract null and void, and released the purchaser from further liability for payment. The Commissioner's determination of a gain by regarding the taxpayer as exchanging the purchaser's installment obligations for the repossessed lot, held, warranted by section 44 (d), Internal Revenue Code, and section 29.44-3,…
1Opinion of the Court
OPINION.
Johnson, Judge:
Petitioners regularly reported on the installment basis profits from their contracts to sell lots, as they are permitted to do by section 44 (b), Internal Revenue Code, under regulations prescribed by the Commissioner with the approval of the Secretary of the Treasury. They returned as income in the taxable years:
* * * that proportion of the installment payments actually received in that year which the gross profit realized or to be realized when payment is completed, bears to the total contract price. [Sec. 44 (a).]
But in respect of certain contracts the purchasers…
2Cases cited2 opinions
- Commissioner v. South Texas Lumber Co.Supreme Court of the United States · 1948
- Pacific National Co. v. WelchSupreme Court of the United States · 1938
3Cited by4 opinions
- Burrell Groves, Inc. v. CommissionerUnited States Tax Court · 1954
- Estate of Broadhead v. CommissionerUnited States Tax Court · 1966
- Burrell Groves, Inc. v. CommissionerUnited States Tax Court · 1954
- Morrison v. CommissionerUnited States Tax Court · 1949