Court Opinion

ID: 9444974
Source: CourtListenerOpinion
Date Created: 2023-08-03 21:17:19.905268+00
Date Added: 2024-06-11T17:30:05.090208
License: Public Domain

DENMAN, Chief Judge
(concurring).
The burden of proof is on the taxpayer to show that the sales of its land in the three fiscal tax years ending May 31, 1947, were incidents of a business of renting houses and were not the sale of its capital assets.
In this situation we are required to eliminate viva voce testimony in. support of the taxpayer’s contention, since the District Court, hearing the witnesses, must be assumed to have disbelieved it.
With regard to the Homewood tract where the houses were first leased for 30 months with an option to purchase and then leased for a year without option, and on finding this was less profitable than to sell them, taxpayer sold the houses, there is no question that the court properly held that the taxpayer had not sustained its burden of proof.
The houses in the Southwood tract were leased for a period between a year and a half and two years and it then appearing that the leasing was less profitable, the houses were sold in the sixteen month period between April, 1945 and August, 1946. The burden of proof here is that the sales over the sixteen months were but an incident of liquidating the business of renting. Eliminating the oral testimony to that effect, the District Court could infer that the taxpayer’s burden of proof had not been maintained.
The sales in the Shoreview tract covered a similar period after a similar rental period and as to them the District Court also must be affirmed.