Standley v. Commissioner
United States Tax Court
P, a dairy farmer, agreed to participate in the Federal Dairy Termination Program (DTP) under which the Government would pay P to cease dairy production for a period of 5 years. P was to be paid based on his milk production. P agreed to cease dairy production, to slaughter or export his dairy animals, and to not allow his farm to be used for dairy purposes.
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P, a dairy farmer, agreed to participate in the Federal Dairy Termination Program (DTP) under which the Government would pay P to cease dairy production for a period of 5 years. P was to be paid based on his milk production. P agreed to cease dairy production, to slaughter or export his dairy animals, and to not allow his farm to be used for dairy purposes. In addition, P was permitted to retain any proceeds he received in exchange for the slaughter or export of his dairy animals. R, in a public notice and on brief, conceded that taxpayers who participated in the DTP could report as capital…
1Opinion of the Court
Gerber, Judge:
Respondent determined a $12,983 Federal income tax deficiency for petitioners’ 1986 taxable year. The issues for our consideration are: (1) Whether amounts received, through a dairy termination program, in excess of the fair market value of cows are taxable as ordinary or capital gains income; (2) the fair market value of petitioners’ cows; and (3) whether petitioners are entitled to a deduction for extraordinary obsolescence or abandonment of their dairy parlor, manure pit, and dairy equipment.
All section references are to the Internal Revenue Code in effect for the year in…
2Cases cited15 opinions
- United States v. S. S. White Dental Manufacturing Co.Supreme Court of the United States · 1927
- United States v. CartwrightSupreme Court of the United States · 1973
- Lyeth v. HoeySupreme Court of the United States · 1938
- Annabelle Candy Co. v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1962
- Fono v. CommissionerUnited States Tax Court · 1982
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