- 9 - v. Eubank, 311 U.S. 122 (1940); Helvering v. Horst, 311 U.S. 112 (1940); Lucas v. Earl, 281 U.S. 111 (1930). The actual reduction to possession is not a requirement. See Helvering v. Horst, supra; Lucas v. Earl, supra. Therefore, petitioner cannot avoid taxation on the capital gain from the sale of the 159,500 units based on the understanding by the purchasers that the proceeds would be used for CDM. Furthermore, even if it would have been illegal for petitioner to keep the proceeds, illegal income is still taxable, and it is still proper to tax petitioner on the proceeds as he owned the units. See James v. United States, 366 U.S. 213, 218 (1961). III. Conclusion Petitioner chose to sell the 159,500 units in Colorcom to third parties. Accordingly, petitioner recognized a capital gain for the amount realized less adjusted basis in the year of the sale. Since petitioner has not proven the adjusted basis of the Colorcom units sold was greater than zero and has not proven an exception to the general rule requiring recognition of the entire gain in the year of sale, we sustain respondent’s determination. In reaching all of our holdings herein, we have considered all arguments made by the parties, and, to the extent not herein discussed, we find them to be irrelevant or without merit.Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
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