Leslie Co. v. Commissioner
United States Tax Court
Petitioner purchased land intending to construct new facilities. Unable to obtain the necessary financing, petitioner entered into a sale and leaseback agreement with Prudential whereby, upon completion of the construction of the new facilities as approved by Prudential, petitioner would sell the property to Prudential for $ 2.4 million and lease it back under a leasehold with an initial term of 30 years.
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Petitioner purchased land intending to construct new facilities. Unable to obtain the necessary financing, petitioner entered into a sale and leaseback agreement with Prudential whereby, upon completion of the construction of the new facilities as approved by Prudential, petitioner would sell the property to Prudential for $ 2.4 million and lease it back under a leasehold with an initial term of 30 years. The sale price was comparable to the fair market value of similar types of property. Likewise the net rental was comparable to the fair rental value of similar types of property. Petitioner…
1Opinion of the Court
Irwin, Judge:
Respondent determined deficiencies in petitioner’s income tax as follows:
Year Deficiency
1965_ $176,551.77
1966_ 50,700.90
1968_ 155,770.75
The issues presented for our determination are (1) whether the sale and leaseback of property by petitioner in 1968 constituted an exchange of property of a like kind within the meaning of section 1031(a)1 and, if so, (2) whether petitioner should be entitled to depreciate the property under any of the methods specified in section 167(b) and to avail itself of investment credits pursuant to section 38.
The deficiencies in 1965 and 1966 result from…
2Cases cited4 opinions
- Century Electric Co. v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1951
- Jordan Marsh Company v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1959
- Molbreak v. CommissionerUnited States Tax Court · 1973
- Vernon Molbreak v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1975
3Cited by11 opinions
- Capri, Inc. v. CommissionerUnited States Tax Court · 1975
- Leslie Co. v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 1976
- Crowley, Milner & Co. v. CommissionerUnited States Tax Court · 1981
- Crowley, Milner & Company, a Michigan Corporation v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1982
- Behrens v. CommissionerUnited States Tax Court · 1985
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