He assigned his royalties to his wife in a 1928 agreement, which ran through tax year 1937. This way his wife paid taxes on the royalties. In 1938 they entered into the same agreement through tax year 1947. Sunnen IRS wants Sunnen to pay taxes on royalties for tax years 1929-1931. The Evergreens sells burial lots.
Taxes depend on how much the lots originally cost.
Evergreens IRS sought taxes on sales of improved lots. Evergreens IRS seeks taxes on sales of unimproved lots. Evergreens argues that value of unimproved lot is simply the value of an improved lot, minus costs of improvements.