Commissioner v. Simmers

SOPER, Circuit Judge.'

Each of these cases relates to the income tax of a landowner in Maryland who, under the practice in vogue in the City of Baltimore and its environs, divided the land into lots and built houses thereon and sold each house subject to the payment of a specified annual ground rent on the lot which was reserved in an agreement of lease. The issue is whether the landowner realized a taxable gain not only on the purchase price of the house at the time of the sale, but also a taxable gain on the reserved ground rent at the time of its creation measured by its fair market value.…