Colony, Inc. v. Commissioner of Internal Revenue, 13008.
| Decision Date | 22 April 1957 |
| Docket Number | No. 13008.,13008. |
| Citation | 244 F.2d 75 |
| Parties | The COLONY, Inc., Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Richard C. Oldham and Baldwin C. Burnam, Louisville, Ky., for petitioner.
Charles K. Rice, John Potts Barnes, Lee A. Jackson, Robert N. Anderson, Grant M. Wiprud, John M. Morawski, and Marvin W. Weinstein, Washington, D. C., for respondent.
Before McALLISTER, MILLER and STEWART, Circuit Judges.
The sole question on this review is whether the five-year statute of limitations contained in section 275(c) of the Internal Revenue Code of 1939, 26 U.S. C.A. § 275(c) was applicable in this case, as the Tax Court held.1
The petitioner is a corporation dealing in real estate. Its income tax returns for the years in question contained understatements of gross income of more than twenty-five per cent resulting from an erroneous overstatement of the basis of land sold, rather than from any omission of gross receipts. Under these circumstances it is the petitioner's contention that the general three-year limitation period of section 275(a) of the 1939 Code is applicable. As petitioner's counsel correctly points out, the decisions of the Courts of Appeals of several other circuits give clear support to this view. Uptegrove Lumber Co. v. Commissioner, 3 Cir., 1953, 204 F.2d 570; Deakman-Wells Co. v. Commissioner, 3 Cir., 1954, 213 F.2d 894; Goodenow v. Commissioner, 8 Cir., 1956, 238 F.2d 20; cf. Slaff v. Commissioner, 9 Cir., 1955, 220 F.2d 65; Davis v. Hightower, 5 Cir., 1956, 230 F. 2d 549.
The reasoning of these cases is not without considerable persuasive force, and if the question were here for the first time, we might be disposed to follow them. However, the question has already been decided by this court in Reis v. Commissioner, 6 Cir., 1944, 142 F.2d 900, where it was held that the five-year limitation was applicable when the taxpayer's understatement of gross income of more than twenty-five per cent was the result of his overstatement of the cost basis of property sold. The facts in the Reis case are, of course, not identical with the facts in the present case, but the issue presented is the same.
Upon the authority of Reis v. Commissioner the decision of the Tax Court is affirmed.
1 ...
To continue reading
Request your trial
-
Intermountain Ins. Serv. of Vail v. Comm'r of Internal Revenue Serv.
...Davis v. Hightower, 230 F.2d 549 (5th Cir.1956) (an overstatement of basis is not an omission from gross income), with Colony, Inc. v. Comm'r, 244 F.2d 75 (6th Cir.1957) (an overstatement of basis is an omission from gross income), rev'd, 357 U.S. 28, 78 S.Ct. 1033, 2 L.Ed.2d 1119 (1958). I......
-
Salman Ranch Ltd v. U.S.
...See Colony, Inc. v. Comm'r, 26 T.C. 30, 35-40, 1956 WL 878 (1956) (discussing details of taxpayer's basis calculations), aff'd, 244 F.2d 75 (6th Cir.1957), rev'd, 357 U.S. 28, 78 S.Ct. 1033, 2 L.Ed.2d 1119 (1958). The Court found that the IRS had all the information it needed to discover th......
-
Intermountain Ins. Serv. of Vail v. Comm'r of Internal Revenue Serv., 10-1204
...v. Hightower, 230 F.2d 549 (5th Cir. 1956) (an overstatement of basis is not an omission from gross income), with Colony, Inc. v. Comm'r, 244 F.2d 75 (6th Cir. 1957) (an overstatement of basis is an omission from gross income), rev'd, 357 U.S. 28 (1958). In light of thiscontinued circuit sp......
-
Norwest Corp. v. Comm'r of Internal Revenue
...Estates, Inc. v. Commissioner, supra at 1293. In Colony, Inc. v. Commissioner, 26 T.C. 30, 1956 WL 878 (1956), affd. per curiam 244 F.2d 75 (6th Cir.1957), a taxpayer in the business of developing and selling real estate argued that the cost of a water supply pumping system that provided wa......