Opinion ID: 276638
Heading Depth: 1
Heading Rank: 7

Heading: Sale of Inherited Property Reported on the Installment Basis.

Text: 30 The various taxpayers inherited property from Joseph Marcello, Sr. The property was sold in 1958 to several corporations, but no gain was reported on any personal tax return and no election to report income on the installment basis was made. In 1962 a Form 1042 (United States Fiduciary Income Tax Return) in the name of Estate of Joseph Marcello, deceased, was filed by Carlos Marcello in which some of the sale proceeds reported and an election to use the installment method 32 was made. The taxpayers contend that this 1962 return and election enables them to use the installment method to report their own shares of the gains from the sale. The taxpayers argue that Carlos acted as agent for each of the other taxpayers and his election on the fiduciary return is, in effect, an election for each of them. 31 The taxpayer wishing the benefit of installment reporting must make an election on his return either for the year of the sale 33 or for the year when the first payment is received. 34 This latter time for making the election was approved by Rev.Rul. 65-297. The taxpayers request that this case be remanded so that the Tax Court can apply the new ruling. 32 The Commissioner contends that, despite the new ruling, the taxpayers should be given no relief. The Commissioner suggests that the fiduciary return was filed for a separate taxpayer, the Estate of Joseph Marcello, Sr., and therefore cannot be the means to make an election for the individual taxpayers. There was no express finding as to the effect or purpose of the fiduciary return. If Carlos filed the return as agent for the individual taxpayers, it may be that they are bound by all that appears on the return. 35 On the other hand, the fiduciary return may have served no significant purpose and may not be binding on the individual taxpayers. In light of the new ruling, we think it proper for the Tax Court to determine the effect of the fiduciary return. 33 Affirmed in part and remanded in part.