C. G. Willis, Inc. v. Commissioner
United States Tax Court
Petitioner's self-propelled ship, Belvedere, was damaged and petitioner invested the insurance proceeds ($ 100,000) and proceeds from the sale of the damaged ship ($ 100,000 less commission) in a $ 270,000 barge. Held, the sale of the damaged ship (which was completely repairable) was not an involuntary conversion within the meaning of section 1033(a)(3)(A) and hence the gain on the sale of the ship in 1958 was taxable.
1Opinion of the Court
OPINION
Section 1033(a) of the Internal Revenue Code of 19541 provides for nonrecognition of gain where property that has been “compulsorily or involuntarily converted” into money or unrelated property and the taxpayer, within a certain period, acquires replacement property that is “similar or related in service or use to the property so converted.”
It appears that petitioner’s realized gain on the sale of the Belvedere was $86,333.10. The original cost basis of the Belvedere in 1953 was $378,000. Petitioner was entitled to amortize 70 percent of this total (or $264,600) under section 124(a) of…
2Cases cited1 opinion
- S. E. Ponticos, Inc. v. CommissionerUnited States Tax Court · 1963
3Cited by13 opinions
- S. & B. Realty Co. v. CommissionerUnited States Tax Court · 1970
- Dorothy C. Thorpe Glass Mfg. Corp. v. CommissionerUnited States Tax Court · 1968
- Lakewood Assocs. v. CommissionerUnited States Tax Court · 1997
- Willamette Indus. v. Comm'rUnited States Tax Court · 2002
- C. G. Willis, Inc. v. CommissionerUnited States Tax Court · 1964
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