Frankenstein v. Commissioner
United States Tax Court
1. Held, lots sold by petitioners during the years here at issue were held by them primarily for sale to customers in the ordinary course of business and the gains derived therefrom are taxable as ordinary income. 2. Held, petitioners are not entitled to add the estimated but unpaid expense of acquiring abstracts to the cost of property sold. 3. Held, petitioners are subject to self-employment taxes for each of the years 1951 through 1954, inclusive. 4. Held, respondent…
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1. Held, lots sold by petitioners during the years here at issue were held by them primarily for sale to customers in the ordinary course of business and the gains derived therefrom are taxable as ordinary income. 2. Held, petitioners are not entitled to add the estimated but unpaid expense of acquiring abstracts to the cost of property sold. 3. Held, petitioners are subject to self-employment taxes for each of the years 1951 through 1954, inclusive. 4. Held, respondent correctly determined an addition to tax under section 294 (d) (2) of the Internal Revenue Code of 1939 against petitioners…
1Opinion of the Court
OPINION.
Van Fossan, Judge:
The first question is whether profits derived from the sale of lots during the years here at issue were gains from the sale of capital assets, or were income from property held primarily for sale to customers in the ordinary course of business.
Petitioner contends that the lots were held for investment and that their sale resulted in long-term capital gains.1 Respondent determined that the lots were held by petitioner primarily for sale to customers in the ordinary course of business, as defined in the exclusion from capital assets,2 and that the profits were…
2Cases cited5 opinions
- Thrift v. CommissionerUnited States Tax Court · 1950
- Boomhower v. United StatesDistrict Court, N.D. Iowa · 1947
- Harry P. Gamble, Jr., and Gretchen B. Gamble, Husband and Wife v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1957
- Philbin v. CommissionerUnited States Tax Court · 1956
- Wood v. CommissionerUnited States Tax Court · 1955
3Cited by28 opinions
- Hatfield v. CommissionerUnited States Tax Court · 1977
- Estate of Finder v. CommissionerUnited States Tax Court · 1961
- Hollywood Baseball Ass'n v. CommissionerUnited States Tax Court · 1964
- Adam v. CommissionerUnited States Tax Court · 1973
- Chatterji v. CommissionerUnited States Tax Court · 1970
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