- 5 -
Business Income Tax Return) reporting the gain realized on the
sale of the 11 homesites in question.
Discussion
Respondent determined that the gain that petitioner realized
on the sale of the 11 homesites during the taxable year ended
October 31, 1987, constitutes unrelated business income subject
to Federal income tax under section 512(a)(3)(A). Petitioner
counters that the gain in question qualifies for nonrecognition
treatment under section 512(a)(3)(D).
It is well established that the Commissioner's deficiency
determination generally carries with it a presumption of
correctness and that the taxpayer bears the burden of proving
that the determination is incorrect. Rule 142(a); Welch v.
Helvering, 290 U.S. 111, 115 (1933). Moreover, it has often been
said:
Exemptions as well as deductions are matters of
legislative grace, and a taxpayer seeking either must
show that he comes squarely within the terms of the law
conferring the benefit sought * * *.
Nelson v. Commissioner, 30 T.C. 1151, 1154 (1958); see New
Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934).
The parties agree that petitioner is an organization
described in section 501(c)(7) that is exempt from income
taxation under section 501(a).4 Notwithstanding its exempt
4Sec. 501(c)(7) provides:
(continued...)
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011