Sirbo Holdings, Inc. v. Commissioner
United States Tax Court
The petitioner leased its property for use as a theater or broadcast studio pursuant to a lease whereby the lessee was obligated to restore the property to its original condition, reasonable wear and tear excepted. In the negotiations for a new lease, the lessee paid the petitioner $ 125,000 for "updating" the restoration clause.
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The petitioner leased its property for use as a theater or broadcast studio pursuant to a lease whereby the lessee was obligated to restore the property to its original condition, reasonable wear and tear excepted. In the negotiations for a new lease, the lessee paid the petitioner $ 125,000 for "updating" the restoration clause. Held, the payment in question did not constitute an amount received on account of a sale or exchange or a compulsory or involuntary conversion of property within the meaning of sec. 1231, I.R.C. 1954.
1Opinion of the Court
SUPPLEMENTAL OPINION
Qtjealy, Judge:
In our opinion entered January 27, 1972 ( 57 T.C. 530), on the basis of the facts in this case we held that the sum of $125,000 received by the petitioner in consideration for the “updating” of the restoration clause in a lease did not constitute an amount realized either from the sale or exchange of property or from the compulsory or involuntary conversion of property within the meaning of section 1231.1 On appeal, the U.S. Court of Appeals for the Second Circuit remanded the case for reconsideration of our decision. 476 F. 2d 981 (decided March 23, 1973).
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2Cases cited13 opinions
- Burnet v. HarmelSupreme Court of the United States · 1932
- Commissioner v. BrownSupreme Court of the United States · 1965
- Helvering v. HammelSupreme Court of the United States · 1941
- Fairbanks v. United StatesSupreme Court of the United States · 1939
- Commissioner of Internal Revenue v. José FerrerCourt of Appeals for the Second Circuit · 1962
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3Cited by5 opinions
- Sirbo Holdings, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1975
- Estate of Israel v. CommissionerUnited States Tax Court · 1997
- Estate of Israel v. CommissionerUnited States Tax Court · 1997
- Estate of Leon Israel, Jr., Barry W. Gray, and Audrey H. Israel v. CommissionerUnited States Tax Court · 1997
- Sirbo Holdings, Inc. v. CommissionerUnited States Tax Court · 1974