Forest G. Smith, Jr., and Rose Mary Smith v. Commissioner of Internal Revenue

Ninth Circuit

Forest G. Smith, Jr., and Rose Mary Smith v. Commissioner of Internal Revenue

324 F.2d 725, 12 A.F.T.R.2d (RIA) 6023, 1963 U.S. App. LEXIS 3576

CourtCourt of Appeals for the Ninth Circuit

DecidedNovember 27, 1963

Docket18641_1

StatusPublished

Cited by27 cases

This text of 324 F.2d 725 (Forest G. Smith, Jr., and Rose Mary Smith v. Commissioner of Internal Revenue) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Forest G. Smith, Jr., and Rose Mary Smith v. Commissioner of Internal Revenue, 324 F.2d 725, 12 A.F.T.R.2d (RIA) 6023, 1963 U.S. App. LEXIS 3576 (9th Cir. 1963).

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Opinion

BROWNING, Circuit Judge.

Having examined the record and the pertinent authorities, we are satisfied that the decision of the Tax Court must be affirmed.

1. We do not read the stipulation filed with tire Tax Court as precluding consideration of evidence extrinsic to the documents of sale bearing upon the intent of the taxpayer and the purchaser; and, of course, the parole evidence rule could not have that effect as between, the Commissioner and the taxpayer. Thorsness v. United States, 260 F.2d 341, 345 (7th Cir. 1958), and cases cited; Stern v. Commissioner, 137 F.2d 43, 46 (2d Cir. 1943).

2. The court properly held, as a matter of statutory construction, that the assumption of personal obligations of a taxpayer by a solvent third person may be treated as “money received” by the taxpayer, within the meaning of Section 1001(b) of the 1954 Code, to the amount of the obligations assumed. Cf. Crane v. Commissioner, 331 U.S. 1, 12-14, 67 S.Ct. 1047, 91 L.Ed. 1301 (1947); Commissioner v. Fortee Properties, Inc., 211 F.2d 915, 916 (2d Cir., 1954); Parker v. Delaney, 186 F.2d 455, 458 (1st Cir., 1950); R. O’Dell & Sons Co. v. Commissioner, 169 F.2d 247, 248 (3d Cir., 1948); Mendham Corporation v. Commissioner, 9 T.C. 320 (1947).

3. The essential findings of fact of the Tax Court are not clearly erroneous.

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BROWNING, Circuit Judge.

Having examined the record and the pertinent authorities, we are satisfied that the decision of the Tax Court must be affirmed.

1. We do not read the stipulation filed with tire Tax Court as precluding consideration of evidence extrinsic to the documents of sale bearing upon the intent of the taxpayer and the purchaser; and, of course, the parole evidence rule could not have that effect as between, the Commissioner and the taxpayer. Thorsness v. United States, 260 F.2d 341, 345 (7th Cir. 1958), and cases cited; Stern v. Commissioner, 137 F.2d 43, 46 (2d Cir. 1943).

2. The court properly held, as a matter of statutory construction, that the assumption of personal obligations of a taxpayer by a solvent third person may be treated as “money received” by the taxpayer, within the meaning of Section 1001(b) of the 1954 Code, to the amount of the obligations assumed. Cf. Crane v. Commissioner, 331 U.S. 1, 12-14, 67 S.Ct. 1047, 91 L.Ed. 1301 (1947); Commissioner v. Fortee Properties, Inc., 211 F.2d 915, 916 (2d Cir., 1954); Parker v. Delaney, 186 F.2d 455, 458 (1st Cir., 1950); R. O’Dell & Sons Co. v. Commissioner, 169 F.2d 247, 248 (3d Cir., 1948); Mendham Corporation v. Commissioner, 9 T.C. 320 (1947).

3. The essential findings of fact of the Tax Court are not clearly erroneous.

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324 F.2d 725, 12 A.F.T.R.2d (RIA) 6023, 1963 U.S. App. LEXIS 3576, Counsel Stack Legal Research, https://law.counselstack.com/opinion/forest-g-smith-jr-and-rose-mary-smith-v-commissioner-of-internal-ca9-1963.

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