People ex rel. Johnson v. Browne

273 A.D. 1041, 79 N.Y.S.2d 165, 1948 N.Y. App. Div. LEXIS 5873

Opinion

Review under article 78 of the Civil Practice Act of respondents’ determination which affirmed an additional income tax assessment against relators for the year 1940. The assessment was occasioned by respondents’ disallowance of a deduction from income of a loss sustained by relators upon the sale of their farm in Pennsylvania which, since 1934, they had rented to a tenant for stipulated rentals. Relators were not otherwise engaged in farming, in real estate transactions, or with the farm they owned and sold beyond such acts as were appropriate to safeguard their ownership. The relators were not engaged in business merely because of their ownership and rental of the farm. (People ex rel. Nauss v. Graves, 283 H. Y. 383; People ex rel. Voelhel V. Browne, 268 App. Div. 596, affd. 294 H. Y. 834; People ex rel. Whitney V. Loughman, 220 App. Div. 30; People ex rel. Merrill V. Gilchrist, 212 App. Div. 763; People ex rel. Kernochan v. Wendell, 198 App. Div. 197, affd. 232 H. Y. 551.) Respondents correctly determined that the property was a capital asset, and the loss sustained on its sale was a capital loss. Determination unanimously confirmed, with costs to respondents. Present— Hill, P. J., Brewster, Foster, Russell and Deyo, JJ.