- 13 - In the instant case, the continued use of the trust land for casino operations does not decrease the economic value of the land. In this regard, there is no exploitation of the land by the Prairie Island Indian Community resulting in a diminution of the land's value. Moreover, persons gambling and enjoying food and drink in the casino are paying principally for the use of the casino facilities. Thus, the per capita distributions petitioner received were primarily derived from the utilization of a capital improvement; i.e., the casino, and not from the land itself. See Beck v. Commissioner, supra. Petitioner agrees that, absent his possession of a lease to farm the 270 acres, the $43,380 per capita distribution would be subject to Federal income tax.8 However, petitioner argues that the existence of his lease provides him with a special exemption from the general taxability of the income derived from the casino operations. Petitioner points out that, if he had farmed the 270 acres in 1992, all the income derived from such farming activity would have been exempt from Federal income tax under the "derived directly" standard. Petitioner argues that, because he held a lease on the land upon which the casino was located and operated, 8 The courts have uniformly denied an exemption for an Indian's distributive share of income derived from unallotted tribal lands held in trust for the tribe as a whole. E.g., Anderson v. United States, 845 F.2d 206 (9th Cir. 1988); Holt v. Commissioner, 364 F.2d 38 (8th Cir. 1966), affg. 44 T.C. 686 (1965).Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011