Lockhart v. Commissioner
United States Tax Court
The phrase "income which would be returnable," prescribed in section 44 (d) of the Internal Revenue Code as a factor to be used in determining the basis for computing gain or loss upon the satisfaction of installment obligations at less than face value, held to mean the entire profit that would result if the obligations were satisfied in full, and not merely the percentage of such profit that would be taken into account by an individual under section 117 (b) in computing net…
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The phrase "income which would be returnable," prescribed in section 44 (d) of the Internal Revenue Code as a factor to be used in determining the basis for computing gain or loss upon the satisfaction of installment obligations at less than face value, held to mean the entire profit that would result if the obligations were satisfied in full, and not merely the percentage of such profit that would be taken into account by an individual under section 117 (b) in computing net income.
1Opinion of the Court
OPINION.
Arundell, Judge:
The parties agree that the sale of stock was an installment sale. The dispute has to do with the proper method of computing the admitted gain on the satisfaction of the unpaid installment obligations'in 1939. Sections 44 (d) and 117 (b) of the Internal Revenue Code1 are the pertinent provisions of law to which we are to look for a proper disposition of the controversy.
The “basis of the obligations” is defined as the excess of their face value over an amount equal to the income that would be returnable were the obligations satisfied in full. The parties agree that if…
2Cited by4 opinions
- Benedict v. United StatesUnited States Court of Claims · 1949
- Borough Operating Corp. v. CommissionerUnited States Tax Court · 1956
- Lockhart v. CommissionerUnited States Tax Court · 1943
- Lockhart v. CommissionerUnited States Tax Court · 1943