United States v. Paul White and Anna Lee White

PICKETT, Circuit Judge.

This tax refund case presents the question of the appropriate treatment, for purposes of federal income taxation, of a $175,000 payment received upon a transfer of a mineral interest in Colorado lands. In their joint federal income tax return for 1956, the taxpayers, Paul White and Anna Lee White, reported the payment as income from the sale of a capital asset pursuant to Sections 1201 and 1202 of the Internal Revenue Code of 1954. A deficiency was assessed on the theory that this sum constituted ordinary income, and, after paying the tax and filing a claim for refund,…