United States v. Marshall, No. 20110.
| Court | United States Courts of Appeals. United States Court of Appeals (9th Circuit) |
| Writing for the Court | MERRILL and DUNIWAY, Circuit , and TAVARES |
| Citation | 357 F.2d 294 |
| Parties | UNITED STATES of America, Defendant-Appellant, v. James H. MARSHALL and Thelma Marshall, Plaintiffs-Appellees. |
| Decision Date | 08 March 1966 |
| Docket Number | No. 20110. |
357 F.2d 294 (1966)
UNITED STATES of America, Defendant-Appellant,
v.
James H. MARSHALL and Thelma Marshall, Plaintiffs-Appellees.
No. 20110.
United States Court of Appeals Ninth Circuit.
March 8, 1966.
Manuel L. Real, U. S. Atty., Loyal E. Keir, Asst. U. S. Atty., Chief, Tax Div., James S. Bay, Asst. U. S. Atty., Los Angeles, Cal., Richard M. Roberts, Acting Asst. Atty. Gen., Lee A. Jackson, I. Henry Kutz, Fred E. Youngman, Attys., Dept. of Justice, Washington, D. C,. for appellant.
Driscoll, Harmsen & Wilkins, by Harlan F. Harmsen, John Gerald Driscoll, Jr., San Diego, Cal., for appellee.
Before MERRILL and DUNIWAY, Circuit Judges, and TAVARES, District Judge.
TAVARES, District Judge:
In 1959 Plaintiffs-Appellees sold their sole proprietorship business to a corporation, 60% of whose stock was owned by them. The $110,513.22 sale price was to be paid by the corporation assuming a $9,944.36 account owing to appellees, by its assuming $25,568.86 in current liabilities of the proprietorship, and by its executing a promissory note to the appellees for $75,000. During 1959 plaintiffs received payment of the $9,944.36 account plus $4,000 in payment on the $75,000 note, and, in the ordinary course of business, the corporation paid obligations totaling $25,568.86 for which appellees had been personally liable.
Appellees reported the resulting $20,287.39 long-term capital gain on an installment basis, pursuant to 26 U.S.C. § 453. The Commissioner of Internal Revenue disallowed the installment basis for returning the gain, contending that appellees received more that 30% of the selling price in 1959 by virtue of the corporation paying the $25,568.86 in current business obligations for which appellees had been personally liable.
Title 26 U.S.C. § 453 provides in material part, "* * * income from * * * a casual sale or other casual disposition of personal property * * * for a price exceeding $1,000, may (under regulations prescribed by the Secretary or his delegate) be returned on the installment plan by returning as income in any taxable year that proportion of the installment payments actually received in that year which the gross profit, realized or to be realized when payment is completed, bears to the total contract price."
But this provision applies "only if in the taxable year of the sale * * * the payments * * * do not exceed 30 per cent of the selling price."
The question we face is whether the phrase "payments actually received" includes payment by the purchaser of business debts assumed by it. We are aided in our task of statutory construction by the construction which the Treasury Department has given to this phrase through regulations and rulings.
Treasury Regulations (26 CFR § 1.453-4) expressly provide that where a sale of real property involves deferred periodic payments, the amount of a mortgage is included in computing the selling price, but is excluded (to the extent it does not exceed the seller's basis) in determining the amount of payments received by the seller in the year of sale. By their terms these regulations apply whether or not the mortgage is assumed by the purchaser, and even apply where there is no mortgage, but merely a...
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Lisle v. Commissioner, Docket No. 1760-73
...have identical objectives and effects. J.W. McWilliams Dec. 4855, 15 B.T.A. 329, 342-343; and United States v. Marshall 66-1 USTC ¶ 9313, 357 F. 2d 294, 295 (C.A. 9, 1966). * * See also Ray A. Maher Dec. 30,458, 55 T.C. 441, 452 (1970). 3. Intent of the Parties The intent of the parties as ......
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Bostedt v. Comm'r of Internal Revenue, Docket No. 5395-75.
...38 B.T.A. 1225 (1938), followed; Irwin v. Commissioner, 390 F.2d 91 (5th Cir. 1968), revg. 45 T.C. 544 (1966); United States v. Marshall, 357 F.2d 294 (9th Cir. 1966); Horneff v. Commissioner, 50 T.C. 63 (1968), vacated and remanded by unpublished order (3d Cir. 1969), distinguished. [70 T.......
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Riss v. CIR, No. 8530.
...does not recite an assumption by Astor of the Riss family's partnership liabilities. The taxpayer's reliance on United States v. Marshall, 357 F.2d 294 (9th Cir.), which concerned the installment provisions of § 453, assumes that the parties or the Riss family considered that the cancellati......
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Irwin v. CIR, No. 24182.
...the Ninth Circuit which was 390 F.2d 94 decided just nine days prior to the Tax Court decision. United States v. Marshall, 9 Cir., 1966, 357 F.2d 294. The facts in the Marshall case were that the taxpayers, husband and wife, sold their proprietorship to a corporation. A part of the sales pr......
-
Lisle v. Commissioner, Docket No. 1760-73
...have identical objectives and effects. J.W. McWilliams Dec. 4855, 15 B.T.A. 329, 342-343; and United States v. Marshall 66-1 USTC ¶ 9313, 357 F. 2d 294, 295 (C.A. 9, 1966). * * See also Ray A. Maher Dec. 30,458, 55 T.C. 441, 452 (1970). 3. Intent of the Parties The intent of the parties as ......
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Bostedt v. Comm'r of Internal Revenue, Docket No. 5395-75.
...38 B.T.A. 1225 (1938), followed; Irwin v. Commissioner, 390 F.2d 91 (5th Cir. 1968), revg. 45 T.C. 544 (1966); United States v. Marshall, 357 F.2d 294 (9th Cir. 1966); Horneff v. Commissioner, 50 T.C. 63 (1968), vacated and remanded by unpublished order (3d Cir. 1969), distinguished. [70 T.......
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Riss v. CIR, No. 8530.
...does not recite an assumption by Astor of the Riss family's partnership liabilities. The taxpayer's reliance on United States v. Marshall, 357 F.2d 294 (9th Cir.), which concerned the installment provisions of § 453, assumes that the parties or the Riss family considered that the cancellati......
-
Irwin v. CIR, No. 24182.
...the Ninth Circuit which was 390 F.2d 94 decided just nine days prior to the Tax Court decision. United States v. Marshall, 9 Cir., 1966, 357 F.2d 294. The facts in the Marshall case were that the taxpayers, husband and wife, sold their proprietorship to a corporation. A part of the sales pr......