Court Opinion

ID: 9464581
Source: CourtListenerOpinion
Date Created: 2023-08-04 23:37:54.939996+00
Date Added: 2024-06-11T17:38:43.418167
License: Public Domain

PREGERSON, District Judge,
concurring:
Whether taxpayers’ real property was “held primarily for sale to customers in the ordinary course of [taxpayers’] trade or business” within the meaning of 26 U.S.C. § 543(b)(3) is a question of law, see Estate of Franklin v. Commissioner, 544 F.2d 1045, 1047, n. 3 (9th Cir. 1976), to which the “clearly erroneous” rule should be inapplicable. Winthrop v. Commissioner, 417 F.2d 905, 910 (5th Cir. 1969).
While referring to the “clearly erroneous” standard, Ninth Circuit cases such as Austin v. Commissioner, 263 F.2d 460 (1959), still carefully analyze the facts in light of the applicable law. This careful analysis, in effect, amounts to a de novo review of the Tax Court’s legal conclusion.
I vote to reverse because an analysis of the facts of this case in light of the applicable law reveals that the Tax Court reached an incorrect legal conclusion.