Dougherty v. Commissioner

9 T.C.M. 92, 1950 Tax Ct. Memo LEXIS 281

Opinion

James R. Dougherty et al. ¹ v. Commissioner.

Dougherty v. Commissioner

Docket Nos. 20475, 20476, 20477, 20478, 20479, 20480, 20481, 20482, 20483.

United States Tax Court

1950 Tax Ct. Memo LEXIS 281; 9 T.C.M. (CCH) 92; T.C.M. (RIA) 50033;

February 8, 1950

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Fair market value on March 1, 1913 of certain Texas lands, determined.

Wesley E. Seale, Esq., 1108 Wilson Bldg., Corpus Christi, Tex., and Charles E. Pratt, Esq., for the petitioners. F. S. Gettle, Esq., and Joseph P. Crowe, Esq., for the respondent.

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VAN FOSSAN

Memorandum Opinion

VAN FOSSAN, Judge: The respondent determined deficiencies and transferee liabilities as follows:

	Income	Declared Value
	Tax	Excess-Profits Tax
James R. Dougherty, Transferee, 1943	$12,750.62	$3,641.61
January 1 to July 31, 1944	1,078.51
M. F. Garcia, Transferee, 1943	12,750.62	3,641.61
January 1 to July 31, 1944	1,078.51
Maria G. (Mrs. H. R.) Thomas, Transferee, 1943	12,750.62	3,641.61
January 1 to July 31, 1944	1,078.51
Isabel Y. Garcia, Transferee, 1943	12,750.62	3,641.61
January 1 to July 31, 1944	1,078.51
Martin E. Garcia, Transferee, 1943	12,750.62	3,641.61
January 1 to July 31, 1944	1,078.51
J. A. Garcia, Transferee, 1943	12,750.62	3,641.61
January 1 to July 31, 1944	1,078.51
Martin E. Garcia and Estela C. Garcia, Individ-
ually, 1944	1,822.99
J. A. Garcia and Bertha C. Garcia, Individually,
1944	1,177.82
Isabel Y. Garcia, Individually, 1944	11,990.93

Various errors originally assigned were settled by agreement of the parties and will be given effect in the recomputation under Rule 50. The transferees admit liability for any tax found due and unpaid from the Garcia Land & Livestock Company, which was dissolved by the stockholders in July 1944.

The sole question presented for decision is the March 1, 1913 value of 1,224.72 acres of land located in Porcion 48, Hidalgo County, Texas, which land was sold by the transferor in 1943. In determining gain on the transaction, respondent used $3 per acre as the March 1, 1913 value. Petitioners ask for a value of $40 per acre.

[The Facts]

Porcion 48 is located in the Rio Grande Valley of Texas and borders the Rio Grande River. ²

By virtue of extending to the Rio Grande River, Porcion 48 had riparian rights thereon. The specific land in question lies in the western part of Porcion 48 and is located six miles northwest of the town of Mission, Texas. The acreage is approximately one-half mile wide and six or seven miles long. At the basic date, the land was open range land, largely covered by brush.

There was some farming near Mission at the basic date and some of the land was irrigated. None of Porcion 48 was under irrigation at that time. The Missouri Pacific Railroad extended through this territory and the depot was built at Mission in 1909.

The acreage in question was located on a bench or shelf of land from 60 feet to 100 feet above the level of the Rio Grande River. There was dispute in 1913 as to whether or not the land was readily available for irrigation. The southern part of the 1,224.72 acres was located about five or six miles from the river. At the basic date the principal use to which the land was put was for pasturage of cattle.

Subsequent to March 1, 1913, the Garcia Land & Livestock Company, the owner of the land under valuation, expended a total of $1,145.85 for the purchase of 3.74 acres and for clearing title to the same. This sum should be added to the fair market value as determined.

The fair market value of the 1,224.72 acres of land above described, on March 1, 1913, was $12.50 per acre.

[Opinion]

The above value has been determined after weighing all the evidence, studying the qualifications of the several witnesses who testified to varying values, and taking into account all the facts deemed pertinent found in the record. The figure of $1,145.85, above referred to, will be added to the basic value in determining the amount of gain ealized by the transferor in the 1943 sale.

Decisions will be entered under Rule 50.

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Footnotes

• 1. Proceedings of the following petitioners have been consolidated herewith: M. F. Garcia; Maria G. (Mrs. H. R.) Thomas; Isabel Y. Garcia; Martin E. Garcia; J. A. Garcia; Martin E. Garcia and Estela C. Garcia, Husband and Wife; J. A. Garcia and Bertha C. Garcia, Husband and Wife; and Isabel Y. Garcia.

• 2. The word "Porcion" is of Spanish origin and designates certain lands distributed in the 18th century to colonists. The porcions were approximately 15 miles in length and of varying widths.