Richards v. Commissioner of Internal Revenue, 7835.
Decision Date | 20 January 1936 |
Docket Number | No. 7835.,7835. |
Parties | RICHARDS v. COMMISSIONER OF INTERNAL REVENUE. |
Court | U.S. Court of Appeals — Ninth Circuit |
C. E. McDowell, of Los Angeles, Cal., for petitioner.
Frank J. Wideman, Asst. Atty. Gen., and Sewall Key, Joseph M. Jones, and Berryman Green, Sp. Assts. to Atty. Gen., for respondent.
Before WILBUR, DENMAN, and HANEY, Circuit Judges.
Petitioner asks this court to review a decision of the Board of Tax Appeals upholding the Commissioner's decision that certain real property owned by petitioner and his wife was not a "capital asset" and that therefore the joint income tax return of petitioner and wife showed a deficiency inasmuch as the return filed included the amount received from the sale of this real property as a capital gain.
Petitioner seeks to bring the income received under the provisions of the Revenue Acts of 1926 and 1928, the returns in question being for the years 1927 and 1928. The statutes, so far as applicable here, are substantially alike, and levy a level tax of "12½ per centum of the capital net gain." Revenue Act 1926, § 208 (b), 44 Stat. 20; Revenue Act 1928, § 101(b), 45 Stat. 811. These acts (sections 208 (a) (1) and 101 (c) (1) define "capital gain" to mean "taxable gain from the sale or exchange of capital assets." Therefore, before petitioner may claim the income in question to be capital gain, he must show that the real property sold by him was a "capital asset." The appropriate acts (section 208 (a) (8), 44 Stat. 19; section 101 (c) (8), 45 Stat. 811) define "capital assets" as follows:
"`Capital assets' means property held by the taxpayer for more than two years (whether or not connected with his trade or business), but does not include * * * property held by the taxpayer primarily for sale in the course of his trade or business."
For these acts, see Historical Note to 26 U.S.C.A. § 101.
The Commissioner contends that the real property in question was not a capital asset, and the issue presented to the Board was whether or not the real property was "held by the taxpayer primarily for sale in the course of his trade or business." The determination of this issue is the ultimate fact. See Tricou v. Helvering (C. C.A.9) 68 F.(2d) 280, certiorari denied 292 U.S. 655, 54 S.Ct. 865, 78 L.Ed. 1503, and rehearing denied 293 U.S. 629, 55 S. Ct. 67, 79 L.Ed. 715, and Winnett v. Helvering (C.C.A.9) 68 F.(2d) 614.
The Board determined the ultimate fact to be:
"* * * That the lots were held by the petitioner primarily for sale in the course of his business. * * *"
We are limited therefore to an examination of the record to ascertain whether or not there is any substantial evidence to sustain the finding. Helvering v. Rankin, 295 U.S. 123, 55 S.Ct. 732, 79 L.Ed. 1343, and cases cited; Pedder v. Commissioner of Internal Revenue (C.C.A.9) 60 F.(2d) 866; Westlake Public Market v. Commissioner of Internal Revenue (C.C.A. 9) 69 F.(2d) 291; Old Mission P. Cement Co. v. Commissioner of Int. Rev. (C.C.A. 9) 69 F.(2d) 676, affirmed 293 U.S. 289, 55 S.Ct. 158, 79 L.Ed. 367; Helvering v. Ackerman (C.C.A.9) 71 F.(2d) 586; Commissioner of Internal Revenue v. Gerard (C.C.A.9) 75 F.(2d) 542. Petitioner concedes that he subdivided his real property and held it thereafter primarily for sale, and says in his brief:
* * *"
The question before this court, then, is: Is there any substantial evidence to support the finding of the Board that petitioner engaged in a trade or business of selling real property by the sale of the lots in question?
The evidentiary facts from which the finding was made are set out in the opinion of the Board. These facts were taken from two affidavits with exhibits attached which were submitted to the Board upon a stipulation that they might be received in evidence. These evidentiary facts are undisputed, and are as follows:
To continue reading
Request your trial-
Curtis Company v. Commissioner of Internal Revenue, 11764 and 11765.
...source of the well established principle that manner and purpose of holding property may change or be twofold. Richards v. Commissioner, 9 Cir., 1936, 81 F.2d 369, 106 A.L.R. 249; and Cohn v. Commissioner, supra; Rollingwood Corp. v. Commissioner, supra; Home Co. v. Commissioner, supra; Kin......
-
Boomhower v. United States
...125 F.2d 532, 535, 536, 144 A.L.R. 349; Kenan v. Commissioner, 2 Cir., 1940, 114 F.2d 217, 220; See also Richards v. Commissioner, 9 Cir., 1936, 81 F.2d 369, 372, 106 A.L.R. 249. Several tests have been referred to by the courts in analyzing the nature of the transactions by a taxpayer for ......
-
Grace Bros. v. Commissioner of Internal Revenue
...Tax Court saw clearly this distinction and concluded correctly that no conversion took place in this case. See Richards v. Commissioner, 9 Cir., 1936, 81 F.2d 369, 106 A.L.R. 249. The judgment of the Tax Court is ...
-
Greenspon v. Commissioner of Internal Revenue
...F.Supp. 997; In re Estate of Jacques Ferber, 22 T.C. 261. There are also cases reaching the contrary conclusion, such as Richards v. Commissioner, 9 Cir., 81 F.2d 369, and Ehrman v. Commissioner, 9 Cir., 120 F.2d 607, relied upon by the Tax Court, and cases cited by the Commissioner, among ......