212 Corp. v. Commissioner
United States Tax Court
1. H and W transferred appreciated real property to a corporation in exchange for an annuity. Held, the recoverable "investment in the contract," as defined in sec. 72(c), I.R.C. 1954, is the fair market value of the property transferred; the fair market value of such property determined. 2. Held, the gain resulting from the transfer of such properties is taxable to the transferors in the year of the exchange.
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1. H and W transferred appreciated real property to a corporation in exchange for an annuity. Held, the recoverable "investment in the contract," as defined in sec. 72(c), I.R.C. 1954, is the fair market value of the property transferred; the fair market value of such property determined. 2. Held, the gain resulting from the transfer of such properties is taxable to the transferors in the year of the exchange. Estate of Bell v. Commissioner, 60 T.C. 469 (1973), followed. 3. Held, the bases and useful lives of the properties transferred determined for purposes of computing allowable…
1DissentFay, J.
I respectfully dissent from the majority’s conclusion that petitioners, under the facts of this case, must report gain in 1968 upon the transfer by them of certain real property for the promise to pay an annuity. Specifically, I believe the opinion is erroneous in its determination that the annuity in this case has an ascertainable fair market value.
As a general rule, section 1001 requires the recognition of any gain or loss realized upon the sale or other disposition of property. In this context, the gain realized, and thus reportable, is the amount by which “the sum of any money plus the…
2Cases cited17 opinions
- Burnet v. LoganSupreme Court of the United States · 1931
- United States v. DavisSupreme Court of the United States · 1962
- Arrowsmith v. CommissionerSupreme Court of the United States · 1952
- Johnston v. CommissionerUnited States Tax Court · 1950
- Osenbach v. Commissioner of Internal RevenueCourt of Appeals for the Fourth Circuit · 1952
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