Westchester Dev. Co. v. Commissioner
United States Tax Court
Held, petitioner, a subdivider, recognized ordinary income on sales of the portions of a tract of land which were held for sale in the ordinary course of business and capital gain on sales of the portions of that same tract which were held for investment. Held, further, additions made by petitioner to its reserve for bad debts were reasonable in amount and deductible under sec. 166(c), I.R.C. 1954, as amended.
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Held, petitioner, a subdivider, recognized ordinary income on sales of the portions of a tract of land which were held for sale in the ordinary course of business and capital gain on sales of the portions of that same tract which were held for investment. Held, further, additions made by petitioner to its reserve for bad debts were reasonable in amount and deductible under sec. 166(c), I.R.C. 1954, as amended. Held, further, a tract of land, purchased to be held for sale in the ordinary course of business, was similar or related in service or use to a tract which had been held for that same…
1Opinion of the Court
Fay, Judge:
Respondent has determined deficiencies m the Federal income taxes of petitioner in the amounts of $47,224.77 and $311,871.79 for fiscal years ended February 29, 1968, and February 28, 1969, respectively.
The issues to be decided are:(1) Whether the gain recognized by the petitioner on sales of real estate other than single-family dwelling sites was capital gain or ordinary income;(2) Whether the additions which petitioner made to its bad debt reserve for the years in issue were reasonable in amount, and whether respondent abused his discretion in disallowing deductions claimed by…
2Cases cited23 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Galena Oaks Corporation v. Frank Scofield, Collector of Internal RevenueCourt of Appeals for the Fifth Circuit · 1954
- United States v. Ada Belle Winthrop, Individually and as Under the Will of Guy L. Winthrop, DeceasedCourt of Appeals for the Fifth Circuit · 1969
- Snell v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1938
- Dunlap, Acting Collector of Internal Revenue v. Oldham Lumber CoCourt of Appeals for the Fifth Circuit · 1950
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3Cited by26 opinions
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- Branerton Corp. v. CommissionerUnited States Tax Court · 1975
- Valmont Industries, Inc. v. CommissionerUnited States Tax Court · 1980
- Georgia Fed. Bank, F.S.B. v. CommissionerUnited States Tax Court · 1992
- Thompson v. CommissionerCourt of Appeals for the Sixth Circuit · 1985
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