Graphic Press, Inc. v. Commissioner
United States Tax Court
Under threat of condemnation, the State of California acquired petitioner's land, building, and certain machinery, which had a combined fair market value of $ 317,808. Petitioner concurrently agreed to retain and remove the bulk of its heavy printing machinery, thereby waiving its right under local law to sell the same to the State. The State paid petitioner $ 725,000, which petitioner reinvested and on its return treated as proceeds of an involuntary conversion.
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Under threat of condemnation, the State of California acquired petitioner's land, building, and certain machinery, which had a combined fair market value of $ 317,808. Petitioner concurrently agreed to retain and remove the bulk of its heavy printing machinery, thereby waiving its right under local law to sell the same to the State. The State paid petitioner $ 725,000, which petitioner reinvested and on its return treated as proceeds of an involuntary conversion. Held, a recital in the condemnation agreement that the $ 725,000 was paid for the physical assets acquired does not preclude the…
1Dissent
Wiles, /.,
dissenting: I respectfully dissent from the majority opinion in this case. This Court has repeatedly held that section 1033 is a relief measure designed to prevent inequitable incidences of taxation and, therefore, should be construed liberally to effectuate its purposes. Gaynor News Co., 22 T.C. 1172, 1177 (1954); John Richard Corp., 46 T.C. 41, 44 (1966); William B. Cusack, 48 T.C. 156, 163 (1967).
I believe that the majority opinion unrealistically portrays the substance of the transaction in issue. It is submitted that the following description of the transaction would be more…
2Cases cited5 opinions
- Gaynor News Co. v. CommissionerUnited States Tax Court · 1954
- Lapham v. United StatesCourt of Appeals for the Second Circuit · 1950
- John Richard Corp. v. CommissionerUnited States Tax Court · 1966
- Cusack v. CommissionerUnited States Tax Court · 1967
- Commissioner of Internal Revenue v. Frank W. BabcockCourt of Appeals for the Ninth Circuit · 1958