Slater v. Commissioner

Board of Tax Appeals

Slater v. Commissioner

5 B.T.A. 804, 1926 BTA LEXIS 2771

CourtUnited States Board of Tax Appeals

DecidedDecember 15, 1926

DocketDocket No. 4134.

StatusPublished

Cited by1 cases

This text of 5 B.T.A. 804 (Slater v. Commissioner) is published on Counsel Stack Legal Research, covering United States Board of Tax Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Slater v. Commissioner, 5 B.T.A. 804, 1926 BTA LEXIS 2771 (bta 1926).

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Opinion

[805]*805OPINION.

Murdock:

The petitioner has failed to produce evidence to show that he is entitled to a deduction of any amount under section 214(a) (1) of the Revenue Act of 1918.

There was evidence to show that the sale of the interest in the lease took place in 1919, instead of in 1920, as shown in the return; that the notes received had no market value in 1919; but that in 1920, the petitioner exchanged them for $30,000 in checks, which he then sold for $27,000 in cash or its equivalent.

When property is exchanged for notes of a third party, income is realized in the year in which the transaction takes place to the extent that the fair market value of the notes exceeds the cost of the property, where that property was acquired subsequent: to March 1, 1913. Appeal of Aaron W. Wolfson, 1 B. T. A. 538; Appeal of E. Alice James, 1 B. T. A. 548.

We are not concerned with the petitioner’s income for the year 1919, and we do not know whether or not it was correctly determined. There is nothing to indicate that the Commissioner has not excluded the items indicated on Schedule D of the 1920 return in his calculation of income for that year. The deficiency letter for 1920 is not before us and we do not know just how the deficiency was determined, but there is no satisfactory evidence to show that it was not correctly calculated upon income received from the sale of notes in 1920 at a price which was greater than their fair market value in 1919.

Judgment will be entered after 15 days’ notice, under Bule 50.

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[805]*805OPINION.

Murdock:

The petitioner has failed to produce evidence to show that he is entitled to a deduction of any amount under section 214(a) (1) of the Revenue Act of 1918.

There was evidence to show that the sale of the interest in the lease took place in 1919, instead of in 1920, as shown in the return; that the notes received had no market value in 1919; but that in 1920, the petitioner exchanged them for $30,000 in checks, which he then sold for $27,000 in cash or its equivalent.

When property is exchanged for notes of a third party, income is realized in the year in which the transaction takes place to the extent that the fair market value of the notes exceeds the cost of the property, where that property was acquired subsequent: to March 1, 1913. Appeal of Aaron W. Wolfson, 1 B. T. A. 538; Appeal of E. Alice James, 1 B. T. A. 548.

We are not concerned with the petitioner’s income for the year 1919, and we do not know whether or not it was correctly determined. There is nothing to indicate that the Commissioner has not excluded the items indicated on Schedule D of the 1920 return in his calculation of income for that year. The deficiency letter for 1920 is not before us and we do not know just how the deficiency was determined, but there is no satisfactory evidence to show that it was not correctly calculated upon income received from the sale of notes in 1920 at a price which was greater than their fair market value in 1919.

Judgment will be entered after 15 days’ notice, under Bule 50.

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5 B.T.A. 804, 1926 BTA LEXIS 2771, Counsel Stack Legal Research, https://law.counselstack.com/opinion/slater-v-commissioner-bta-1926.

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