Pittard v. Commissioner

*930OPINION.

Lansdon:

The Commissioner has determined that the tract of 227.54 acres of land acquired by the petitioner prior to March 1, 1913, had a value of $30 per acre at that date. The evidence discloses that an adjacent tract of 49.95 acres of similar land was sold in 1912, or early in 1913, for $40 per acre. The petitioner testified that on account of nut grass infestation there was no increase in the market value of the land in question between March 1, 1913, and the date of sale. We have found that the value of this land was $37.50 per acre at March 1, 1913. No profit resulted from its sale in 1918 at the same price.

To redetermine the deficiency based on the profit realized from the second transaction, we must decide (1) whether this sale was made in 1917 or 1918, and (2) whether taxes on the income from such sale shall be computed by the installment method. The evidence shows that agreement between vendor and vendee was made on November 12,1917. On that date a contract to sell real estate was entered into, 10 per cent of the purchase price was paid to the vendor, and the vendee at once entered into possession. Deferred payments were provided for and made in terms set forth in our findings of fact *931above. We are of the opinion that this sale was effected on November 12, 1917, that the transaction provided for payment of the deferred amount of the purchase price in installments, and that the petitioner’s tax liability as to income resulting therefrom should be determined and computed on the installment basis, as provided for by law and the regulations of the Commissioner.

Judgment toUl be entered on 10 days’ notice, under Rule 50.