Thompson v. United States
| Decision Date | 07 November 1956 |
| Docket Number | No. 290-53.,290-53. |
| Citation | 145 F. Supp. 534,136 Ct. Cl. 671 |
| Parties | Fritz THOMPSON, Individually and as Sole Beneficiary of the Estate of Helen Thompson, Deceased, v. The UNITED STATES. |
| Court | U.S. Claims Court |
E. Byron Singleton, Amarillo, Tex., Singleton & Trulove, Amarillo, Tex., on the brief, for plaintiff.
David R. Frazer, Washington, D. C., with whom was Charles K. Rice, Asst. Atty. Gen., Andrew D. Sharpe and Edward W. Rothe, Washington, D. C., on the brief, for defendant.
Before JONES, Chief Judge, and LITTLETON, WHITAKER, MADDEN and LARAMORE, Judges.
The question presented is whether the profits realized in the years 1946 to 1949 by plaintiff from the sale of lots in a 100-acre tract purchased by him in 1942 are taxable as capital gains or as ordinary income derived by plaintiff in the ordinary course of his trade or business.
Plaintiff was a County Commissioner of Hutchinson County, Texas. As such he was in charge of acquiring the right-of-way for the construction of State Highway 117, which was laid out to run through some land adjacent to the town of Borger, Texas, owned by a family known as the Weatherlys. After acquisition of the highway, plaintiff bought for his own account 100 acres of the Weatherlys land that lay on each side of the new highway, for $5,000.
Shortly after plaintiff's purchase, the Phillips Petroleum Company considerably expanded its refining facilities located about two miles from Borger, and the Defense Plants Corporation began the erection of a synthetic rubber plant about 3 miles from Borger. This caused the influx of thousands of construction workers, creating a serious housing shortage, to such an extent that many people were living in shacks, crowded close together, with no sewers or a sanitary water supply. More and better housing facilities was a crying need. The owners of land did not need to look for a buyer. People were clamoring to buy.
When plaintiff purchased the 100-acre tract there were a number of shanties on it, erected by tenants who paid a certain ground rental. These people occupied two different areas on the tract. They desired to purchase lots on which to build more substantial houses, but they were too poor to pay cash for them. Plaintiff agreed to sell them lots in the northwest corner of the tract on the installment plan, and he platted this portion of his property into lots and streets and alleys for this purpose. This left the remainder of the property available for sale to more desirable purchasers.
Much of the property was hilly and traversed by deep ravines, which necessitated considerable cutting and filling and grading, in order to make it suitable for residential purposes. Plaintiff spent $39,660.65 for levelling, grading, and filling up holes and gulleys. He spent $18,235.50 for paving streets, $7,600.92 for sidewalks, and $1,708.20 for drainage facilities. There was some expense for engineering services, attorney's fees, and platting, making a total expenditure for putting the property in shape, so that lots could be sold, of about $80,500. This was about 16 times what plaintiff had paid for the entire tract.
Plaintiff sold 59 lots in 1945, 63 in 1946...
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Nadalin v. United States
...supra), a golf course operator (Snell v. Commissioner of Internal Revenue, supra), a county commissioner (Thompson v. United States, 145 F.Supp. 534, 136 Ct.Cl. 671 (1956)), or a cashier (Achong v. Commissioner of Internal Revenue, supra). "The fact that petitioner had other full time emplo......
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Thompson v. CIR, 20074.
...this is set out with factual accuracy in the Court of Claims' adverse decision covering the years 1946-1949. Thompson v. United States, 1956, 136 Ct.Cl. 671, 145 F.Supp. 534.3 Borger, Texas, was an oil boom town, perhaps on the wane. But it was hemmed in by four substantial landowners. Taxp......
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Lazarus v. United States, 66-56.
...of land involved in those cases constituted capital gains rather than ordinary income. Conversely, in Thompson v. United States, 1956, 145 F.Supp. 534, 136 Ct.Cl. 671, 673, 674, and in Shearer v. Smyth, D.C.N.D. Cal.1953, 116 F.Supp. 230, 232, affirmed 9 Cir., 1955, 221 F.2d 478, certiorari......
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Thompson v. Comm'r of Internal Revenue
...Memorandum Opinion of this Court. The instant case presents a somewhat unusual factual situation in that the case of Thompson v. Commissioner, 145 F.Supp. 534 (Ct. Cl. 1956) involved the same taxpayer (Fritz Thompson), the same Thompson Addition, and sales of lots from the same units of thi......