Legg v. Commissioner
United States Tax Court
Petitioners sold an apple orchard electing to report the gain on the installment method. The contract provided for payment of interest which aggregated $ 6,000 per year during petitioners' lives; principal payable on their death. Contemporaneous with the sale, petitioners conveyed the installment sales contract to an irrevocable trust retaining the right to receive an annual payment of $ 6,000; the corpus payable on their death to a charitable foundation.
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Petitioners sold an apple orchard electing to report the gain on the installment method. The contract provided for payment of interest which aggregated $ 6,000 per year during petitioners' lives; principal payable on their death. Contemporaneous with the sale, petitioners conveyed the installment sales contract to an irrevocable trust retaining the right to receive an annual payment of $ 6,000; the corpus payable on their death to a charitable foundation. Held, (1) the transfer of the installment obligation to the trust was a disposition of the principal interest within the meaning of sec.…
1Opinion of the Court
Sterrett, Judge:
The Commissioner initially determined deficiencies in petitioners’ Federal income taxes, as follows t1
Year Amount
June 30, 1965_$15, 450.14
June 30, 1966_.- 601. 89
By an amendment to his answer the Commissioner has alleged that the deficiency for the taxable year ended June 30,1966, should be increased to $3,01-3.27.2
Due to concessions, the issues remaining for our determination are:(1) Whether the transfer of a real estate installment sales contract to an inter vivos trust produces a taxable gain and if so, to what extent. This requires us to determine if:(a) the transfer was…
2Cases cited5 opinions
- Minnesota Tea Co. v. HelveringSupreme Court of the United States · 1938
- United States v. FlannerySupreme Court of the United States · 1925
- New York Trust Co. v. CommissionerUnited States Board of Tax Appeals · 1925
- Milby & Dow Coal & Mining Co. v. CommissionerUnited States Board of Tax Appeals · 1931
- Marshall v. United StatesDistrict Court, S.D. California · 1939
3Cited by36 opinions
- Church of Scientology v. CommissionerUnited States Tax Court · 1984
- Estate of Durkin v. CommissionerUnited States Tax Court · 1992
- Hoover Co. v. CommissionerUnited States Tax Court · 1979
- La Fargue v. CommissionerUnited States Tax Court · 1979
- Norwest Corp. v. Comm'rUnited States Tax Court · 1998
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