Culbertson v. Commissioner
United States Tax Court
Petitioners purchased property in 1943 for $ 42,858.55, and sold it in 1944 for $ 70,000 in cash and a note for $ 10,000. Note was secured by second lien of $ 10,000 on property, subordinated to first lien of $ 70,000. Note for $ 10,000 was paid in full in 1945. Held, on the facts, fair market value of note in 1944 was $ 3,000, and following Victor B. Gilbert, 6 T. C. 10, the amount of $ 7,000 constituted ordinary income to petitioners in 1945.
1Opinion of the Court
OPINION.
Johnson, Judge:
Petitioners maintain that the collection by them in 1945 of the face amount of the $10,000 note they had received in 1944 as part of the consideration for the sale of the Mayo Courts property constituted long-term capital gain. It is their position that the note had no fair market value in 1944 and that hence they correctly reported in 1944 as proceeds from the sale of the property only the $70,000 in cash they received in that year. But they maintain that under Regulations 111, section 29.44-2 and section 29.44-4, the amount they realized on the note in 1945 also…
2Cases cited2 opinions
- Greene Motor Co. v. CommissionerUnited States Tax Court · 1945
- Gilbert v. CommissionerUnited States Tax Court · 1946
3Cited by12 opinions
- Underhill v. CommissionerUnited States Tax Court · 1966
- Liftin v. CommissionerUnited States Tax Court · 1961
- Lowe v. CommissionerUnited States Tax Court · 1965
- Earl A. Phillips and Dorothy M. Phillips v. William E. Frank, District Director of Internal RevenueCourt of Appeals for the Ninth Circuit · 1961
- Tombari v. CommissionerUnited States Tax Court · 1960
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