- 12 - 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,Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011