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petitioners request that if it is determined that the amounts
received are included in income (as if the sale had closed), then
the amounts received should be reduced by all or part of the
adjusted basis of the property and reported for Federal tax
purposes under the installment method of reporting.
Gross income means all income from whatever source derived
including gains derived from dealings in property. Sec.
61(a)(3). Gain from the sale of property had been held to be
gross income in the year when the sale is consummated, and not in
the year when the contract was executed. Veenstra & DeHaan Coal
Co. v. Commissioner, 11 T.C. 964, 967 (1948). Under section
1001(a), gain from the sale or other disposition of property is
the excess of the amount realized over the taxpayer’s adjusted
basis in the property.
For purposes of Federal income taxation, a sale occurs upon
the transfer of benefits and burdens of ownership, rather than
upon the satisfaction of the technical requirements for the
passage of title under State law. Derr v. Commissioner, 77 T.C.
708, 723-724 (1981); Yelencsics v. Commissioner, 74 T.C. 1513,
1527 (1980). The question of when a sale is complete for Federal
income tax purposes is essentially one of fact. Baird v.
Commissioner, 68 T.C. 115, 124 (1977). The applicable test is a
practical one that considers all of the facts and circumstances,
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