Opinion ID: 350814
Heading Depth: 1
Heading Rank: 1

Heading: Cost Basis of Land

Text: 6 In 1959, the Williamses acquired two contiguous parcels of 9 and 42 acres, in several transactions. In the transaction here under scrutiny, the 9 acres and a 1/2 interest in the 42 acres were purchased at stated sales prices of $400,000 for the 9 acres and $200,000 for the 42 acres. The cost of acquisition of the remaining 1/2 interest in the 42 acres is agreed to have been some $415,000. The Williamses contend that the values were unintentionally reversed, and that the 9 acres were acquired for $200,000 and the 1/2 interest in the 42 acres for $400,000, so that when some 5 acres of the 42-acre parcel were sold, the basis should have been higher than the Commissioner allowed. 7 There is ample evidence to support the view that the agreements, knowingly and voluntarily made, with no suggestion of fraud, are binding on the Williamses. The tax consequence of such an agreement may be challenged by the Commissioner (Schulz v. C.I.R., 294 F.2d 52 (9th Cir., 1961)), but not by the taxpayer. (Baxter v. C.I.R., 433 F.2d 757 (9th Cir., 1970)). 8 The Tax Court's decision in this issue is affirmed.