Hawaiian Gas Products v. Commissioner of Int. Rev., No. 9833.

CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)
Writing for the CourtGARRECHT, HANEY, and HEALY, Circuit
PartiesHAWAIIAN GAS PRODUCTS, Limited, v. COMMISSIONER OF INTERNAL REVENUE.
Decision Date20 February 1942
Docket NumberNo. 9833.

126 F.2d 4 (1942)

HAWAIIAN GAS PRODUCTS, Limited,
v.
COMMISSIONER OF INTERNAL REVENUE.

No. 9833.

Circuit Court of Appeals, Ninth Circuit.

February 20, 1942.


Heaton L. Wrenn, James M. Richmond, and Anderson, Wrenn & Jenks, all of Honolulu, Hawaii, for petitioner.

Samuel O. Clark, Jr., Asst. Atty. Gen., and Gerald L. Wallace, Edward M. English, and Joseph M. Jones, Sp. Assts. to Atty. Gen., for respondent.

Before GARRECHT, HANEY, and HEALY, Circuit Judges.

GARRECHT, Circuit Judge.

The facts of this case were stipulated by the parties and found by the Board to be substantially as follows:

In 1933 the petitioner, an Hawaiian corporation, having its principal place of business in Honolulu, T. H., acquired certain real estate in the Territory of Hawaii which had an adjusted cost basis in its hands in 1937 of $44,979.48. November 2, 1937, the Territory of Hawaii filed an action in the Territorial Courts to condemn, in eminent domain proceedings, among other parcels of land, the above-mentioned real estate belonging to petitioner. The petitioner filed an answer in that action, recognizing the power and capacity of the Territory of Hawaii to take the real estate under eminent domain, but alleged that it did not wish to sell the property in question. Judgment of condemnation was entered December 1, 1937, which ordered the real estate condemned and payment of damages to petitioner in the sum of $32,500, which sum represented the value of the land as of the date of condemnation. The said sum was paid to, and received by, petitioner in 1937. The transaction resulted in a loss to petitioner in said year in the amount of $12,479.48. The condemnation and taking of the real estate was done without the consent and contrary to the desires of the petitioner.

The question is simply whether the loss sustained by petitioner under the condemnation proceedings was an "ordinary" loss and deductible in full under Section 23(f) of the Revenue Act of 1936, 49 Stat. 1648,

126 F.2d 5
1659, 26 U.S.C.A. Int.Rev.Acts, page 828,1 or a loss resulting from a "sale or exchange" of a capital asset and deductible only to the extent of $2,000, under Section 117(d) of said Act, 49 Stat. 1692, 26 U.S.C.A. Int. Rev. Acts, page 875.2 The Board of Tax Appeals decided that the transaction was governed by Section 117(d), supra

If the eminent domain proceeding amounted to a "sale" within the intendment of Section 117(d), whether or not it was voluntary or involuntary is inconsequential. The real estate was undoubtedly a capital asset, and the capital loss...

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35 practice notes
  • Hollywood Baseball Ass'n v. Comm'r of Internal Revenue, Docket No. 93647.
    • United States
    • United States Tax Court
    • April 21, 1964
    ...fact of sale. Forced sales are no less sales in this context. See Helvering v. Hammel, 311 U.S. 504; Hawaiian Gas Products v. Commissioner, 126 F.2d 4 (C.A. 9), affirming 43 B.T.A. 655, certiorari denies 317 U.S. 653; 44 West 3rd Street Corporation, 39 T.C. 809, affd. 326 F.2d 600 (C.A. 2).......
  • Stockton Harbor Indus. Co. v. Commissioner of Int. Rev., No. 13615.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • December 1, 1954
    ...This Court has held a condemnation to be a "sale" under the revenue laws. Hawaiian Gas Products, Limited v. Commissioner, 9 Cir., 1942, 126 F.2d 4, We advert to the facts found by the Tax Court as to the activity of the corporation over the course of years. When the taxpayer acquired the pr......
  • Likins-Foster Honolulu Corp. v. CIR, No. 10060-10061.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • October 16, 1969
    ...statute. Kieselbach v. Commissioner, 317 U.S. 399, 63 S.Ct. 303, 87 L.Ed. 358; Hawaiian Gas Products v. Commissioner of Int. Rev., 9 Cir., 126 F.2d 4, cert. denied, 317 U.S. 653, 63 S.Ct. 48, 87 L.Ed. 525. See 3B Mertens, Federal Income Taxation, § 22.100. In the condemnation proceedings, a......
  • Commissioner of Internal Revenue v. Kieselbach, No. 7912.
    • United States
    • U.S. Court of Appeals — Third Circuit
    • April 7, 1942
    ...amount to a sale within the meaning of the income tax law. Hawaiian Gas Products, Ltd., v. Commissioner of Internal Revenue, 9 Cir., 1942, 126 F.2d 4. This follows the view of the Second Circuit in Seaside Improvement Co. v. Commissioner of Internal Revenue, 2 Cir., 1939, 105 F. 2d 990; Com......
  • Request a trial to view additional results
35 cases
  • Hollywood Baseball Ass'n v. Comm'r of Internal Revenue, Docket No. 93647.
    • United States
    • United States Tax Court
    • April 21, 1964
    ...fact of sale. Forced sales are no less sales in this context. See Helvering v. Hammel, 311 U.S. 504; Hawaiian Gas Products v. Commissioner, 126 F.2d 4 (C.A. 9), affirming 43 B.T.A. 655, certiorari denies 317 U.S. 653; 44 West 3rd Street Corporation, 39 T.C. 809, affd. 326 F.2d 600 (C.A. 2).......
  • Stockton Harbor Indus. Co. v. Commissioner of Int. Rev., No. 13615.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • December 1, 1954
    ...This Court has held a condemnation to be a "sale" under the revenue laws. Hawaiian Gas Products, Limited v. Commissioner, 9 Cir., 1942, 126 F.2d 4, We advert to the facts found by the Tax Court as to the activity of the corporation over the course of years. When the taxpayer acquired the pr......
  • Likins-Foster Honolulu Corp. v. CIR, No. 10060-10061.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • October 16, 1969
    ...statute. Kieselbach v. Commissioner, 317 U.S. 399, 63 S.Ct. 303, 87 L.Ed. 358; Hawaiian Gas Products v. Commissioner of Int. Rev., 9 Cir., 126 F.2d 4, cert. denied, 317 U.S. 653, 63 S.Ct. 48, 87 L.Ed. 525. See 3B Mertens, Federal Income Taxation, § 22.100. In the condemnation proceedings, a......
  • Commissioner of Internal Revenue v. Kieselbach, No. 7912.
    • United States
    • U.S. Court of Appeals — Third Circuit
    • April 7, 1942
    ...amount to a sale within the meaning of the income tax law. Hawaiian Gas Products, Ltd., v. Commissioner of Internal Revenue, 9 Cir., 1942, 126 F.2d 4. This follows the view of the Second Circuit in Seaside Improvement Co. v. Commissioner of Internal Revenue, 2 Cir., 1939, 105 F. 2d 990; Com......
  • Request a trial to view additional results

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