Holmes v. Commissioner
United States Tax Court
Held, a third-party note, assigned and guaranteed by the purchaser and received by the seller in the year of sale, is not an "evidence of indebtedness of the purchaser," and the fair market value of the note must be taken into consideration in determining the profit to be reported in the year of sale under the installment sale provisions contained in sec. 453, I.R.C. 1954.
1Opinion of the Court
DkeNNEN, Judge-:
Respondent determined a deficiency of $693.89 in petitioner’s Federal income tax for the taxable year 1966.
Due to concessions by petitioners, the only issue for our decision is whether a promissory note of a third party received by petitioners in partial payment for the sale of real property is an “indebtedness of the purchaser” within the meaning of section 453 (b) (2), I.R.C. 1954.1
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
Petitioners Carl F. and Kathleen E. Holmes, husband and wife, resided in Winters, Calif., on the date their petition herein…
2Cases cited4 opinions
- Freeman v. CommissionerUnited States Tax Court · 1961
- Elmore v. CommissionerUnited States Board of Tax Appeals · 1929
- Georgia-Florida Land Co. v. CommissionerUnited States Board of Tax Appeals · 1929
- Walnut Realty Trust v. CommissionerUnited States Board of Tax Appeals · 1931
3Cited by4 opinions
- Allison v. CommissionerUnited States Tax Court · 1976
- Hyman v. CommissionerUnited States Tax Court · 1987
- Holmes v. CommissionerUnited States Tax Court · 1970
- Simpson v. CommissionerUnited States Tax Court · 1976