Funsten v. Commissioner
United States Board of Tax Appeals
Petitioner made two casual sales of stock in the taxable year, the total consideration in each case being a promissory note payable on or before five years from date. In each case a payment of an amount less than 30 percent of the purchase price was made on the note in the year of sale.
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Petitioner made two casual sales of stock in the taxable year, the total consideration in each case being a promissory note payable on or before five years from date. In each case a payment of an amount less than 30 percent of the purchase price was made on the note in the year of sale. Held, that the payment made in each case was an "initial payment" under section 44(b) of the Revenue Act of 1936, and petitioner is entitled to return on the installment basis the gain realized in each transaction.
1Opinion of the Court
*1168OPINION.
Leech :
Kespondent contends that these two sales of stock by petitioner were not sales on the installment plan. He argues that the obligation in each case made no definite provision for installment payments but merely bound the purchaser to pay the total amount on or before five years from the date of purchase, and that the provision for the application of dividends paid on the stock to the reduction of principal of the notes was a purely contingent obligation which would only arise in the event that a dividend was declared and paid. He takes the position that unless the transaction is…
2Cited by5 opinions
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- Funsten v. CommissionerUnited States Board of Tax Appeals · 1941
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- Orange Sec. Corp. v. CommissionerUnited States Board of Tax Appeals · 1941