Court Opinion

ID: 4599130
Source: CourtListenerOpinion
Date Created: 2020-11-20 19:22:43.998708+00
Date Added: 2024-06-11T07:52:04.412737
License: Public Domain

APPEAL OF W. B. PACKMAN.Packman v. CommissionerDocket No. 734.United States Board of Tax Appeals2 B.T.A. 508; 1925 BTA LEXIS 2363; September 8, 1925, Decided Submitted July 15, 1925.  *2363 W. B. Packman, pro se.  John D. Foley, Esq., for the Commissioner.  PHILLIPS *508  Before GRAUPNER, TRAMMELL, and PHILLIPS.  Taxpayer appeals from the determination of a deficiency of $647.70 income tax for 1920.  FINDINGS OF FACT.  During the year 1919 taxpayer purchased a one-third interest in a farm known as the Wangen farm.  In the same year a contract was entered into for the sale of these premises.  The contract was carried out in 1920, the details of the consideration for the sale of the fee being as follows: Cash received in 1919$1,000Cash received in 192012,441First mortgage assumed by purchaser16,000Second mortgage given by purchaser as part payment on this property running for five years at 6 per cent10,000Total consideration39,441The Commissioner fixed the fair market value of the second mortgage at par and determined the profit to the taxpayer on his one-third interest to be $2,810.  During the year 1919 taxpayer purchased a one-half interest in a farm known as the Alden farm.  In the same year a contract was entered into for the sale of these premises.  The contract was carried out in 1920, the*2364  details of the consideration for the sale of the fee being as follows: Cash received in 1919$1,000Cash received in 19205,535First mortgage assumed by purchaser15,000Second mortgage due in five years at 5 1/2 per cent given by purchaser as part payment of property7,000Total consideration28,535*509  The Commissioner fixed the fair market value of the second mortgage at par and determined the profit to the taxpayer on his one-half interest to be $1,550.  During the year 1919 taxpayer purchased a one-half interest in a farm known as the Hoeck farm.  In the same year a contract was entered into for the sale of these premises.  The contract was carried out in 1920, the details of the consideration for the sale of the fee being as follows: Cash received in 1919$1,000Cash received in 19205,800First mortgage assumed by purchaser14,200Second mortgage assumed by purchaser2,000Third mortgage due in five years at 6 per cent given by purchaser as part payment of property4,000Total consideration27,000The Commissioner fixed the fair market value of the third mortgage at par and determined the profit to the taxpayer*2365  on his one-half interest to be $4,541.  During the year 1920 taxpayer also sold property known as the Berggren farm in which he owned a one-half interest.  As a part of the consideration taxpayer received an unsecured note of the purchaser of $2,500, the value of which was fixed by the Commissioner at its face amount, and the profit to the taxpayer determined to be $1,258.88.  DECISION.  The determination of the Commissioner is approved.  OPINION.  PHILLIPS: Taxpayer alleges that the Commissioner committed error in fixing the value of the real estate mortgages and the note received by the taxpayer upon these sales at their face value, and in determining the profit accordingly, but at the hearing no competent evidence of the fair market value of these mortgages or the note was offered.  Taxpayer also claimed that the money to finance these transactions was furnished by his wife's father upon the understanding that one-half of the profit should be the property of Mrs. Packman.  The testimony, however, is insufficient satifactorily to establish such an agreement.  ARUNDELL not participating.