Durkheimer Inv. Co. v. Commissioner
United States Board of Tax Appeals
Pursuant to the terms of a 30-year lease entered into in 1910, the lessee, as additional rent for the premises, erected a new building on the leased property. In 1925 the parties terminated the instrument and executed a new lease for a term of 99 years. In 1932 the lessor terminated the lease because of default of the lessee and acquired repossession of the premises, including the building erected under the terms of the first lease.
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Pursuant to the terms of a 30-year lease entered into in 1910, the lessee, as additional rent for the premises, erected a new building on the leased property. In 1925 the parties terminated the instrument and executed a new lease for a term of 99 years. In 1932 the lessor terminated the lease because of default of the lessee and acquired repossession of the premises, including the building erected under the terms of the first lease. Held, that repossession of the property did not result in a realization of taxable income to the lessor in 1932 of the value of improvements erected by the lessee.
1Opinion of the Court
*425opinion.
Disney :
The respondent included the value of the improvements at the time of repossession in gross income pursuant to provisions of article 63 of Regulations 11, as amended April 10,1935, by X- D. 4539, reported in C. B. XIV-1, 141. The regulations, after providing, in substance, that when buildings erected by a lessee immediately become the property of the lessor, as in cases where they are not subject to removal by the lessee, the lessor has the option of reporting the fair market value thereof or an aliquot part of the value, based upon the life of the lease, in the year of…
2Cases cited2 opinions
- Miller v. GearinCourt of Appeals for the Ninth Circuit · 1919
- Cryan v. WardellDistrict Court, N.D. California · 1920
3Cited by1 opinion
- Durkheimer Inv. Co. v. CommissionerUnited States Board of Tax Appeals · 1937