Manchester Board & Paper Co. v. Commissioner
United States Board of Tax Appeals
A lease of land, together with water privileged, ran for a term of 15 years with a right of renewal by the lessee indefinitely for consecutive terms of 15 years, subject to the right of the lessor to demand an increased rent at each renewal and an obligation, upon termination, to pay the lessee for improvements. The lease was renewed in 1908 for 15 years and the petitioner, who had acquired it in 1910, again renewed it in 1923 for another 15 years.
Read the full summary
A lease of land, together with water privileged, ran for a term of 15 years with a right of renewal by the lessee indefinitely for consecutive terms of 15 years, subject to the right of the lessor to demand an increased rent at each renewal and an obligation, upon termination, to pay the lessee for improvements. The lease was renewed in 1908 for 15 years and the petitioner, who had acquired it in 1910, again renewed it in 1923 for another 15 years. In 1928 the lease was canceled and the petitioner received payments for cancellation of the lease and for the value of the improvements. Held,…
1Opinion of the Court
*111OPINION.
Muedock:
The question in this case is to determine whether all, some part, or none of the $58,000 received by the petitioner in 1928 for the cancellation of its lease, was gain or profit and properly a part of gross income subject to tax. The Commissioner claims that the entire amount was gain, since there was no basis to be subtracted from the amount received. The petitioner contends that it is entitled to deduct from the proceeds as a basis the March 1, 1913, value of its rights under the renewal of the lease then in effect. There was opinion evidence of value on March 1, 1913,…
2Cases cited1 opinion
- 353 Lexington Ave. Corp. v. CommissionerUnited States Board of Tax Appeals · 1933
3Cited by2 opinions
- Lacene Mfg. Corp. v. CommissionerUnited States Tax Court · 1944
- Manchester Board & Paper Co. v. CommissionerUnited States Board of Tax Appeals · 1933