Baker v. Commissioner
United States Tax Court
On April 30, 1955, petitioners, as lessees, acquired a lease to approximately 872 acres of farmland for a term of 10 years commencing January 1, 1957, at a cash rental of $ 7,000 per year.
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On April 30, 1955, petitioners, as lessees, acquired a lease to approximately 872 acres of farmland for a term of 10 years commencing January 1, 1957, at a cash rental of $ 7,000 per year. During the taxable year 1956 petitioners transferred this lease to a family-owned corporation for the sum of $ 30,000 which was paid by the corporation to petitioners on December 31, 1956. Held, the gain of $ 30,000 realized by petitioners is taxable to them as ordinary income by operation of section 1239, I.R.C. 1954, rather than as long-term capital gain as reported by petitioners in their income tax…
1Opinion of the Court
OPINION.
Arundell, Judge: Respondent determined a deficiency in income tax for the calendar year 1956 in the amount of $18,375.14.
The only issue remaining is whether petitioners realized ordinary income by operation of section 1239, I.R.C. 1954, or long-term capital gain from the cash sale in 1956 by petitioners to a family-owned corporation of a 10-year lease on farmland commencing January 1, 1957, which lease petitioners as lessees had acquired at no cost in 1955.
Another issue relating to the rental value of a dwelling house occupied by petitioners has been settled by stipulation and effect…
2Cases cited9 opinions
- Helvering v. Stockholms Enskilda BankSupreme Court of the United States · 1934
- Fackler v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1943
- Century Electric Co. v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1951
- Fackler v. CommissionerUnited States Board of Tax Appeals · 1941
- Atterbury v. CommissionerUnited States Board of Tax Appeals · 1924
4 more not listed; retrieve them via the Exa API.
3Cited by10 opinions
- McNutt-Boyce Co. v. CommissionerUnited States Tax Court · 1962
- Estate of Shea v. CommissionerUnited States Tax Court · 1971
- Challenger, Inc. v. CommissionerUnited States Tax Court · 1964
- Tribune Publishing Co. v. CommissionerUnited States Tax Court · 1969
- Baker v. CommissionerUnited States Tax Court · 1962
5 more not listed; retrieve them via the Exa API.