Kline v. Commissioner

Appeal of M. KLINE.
Kline v. Commissioner
Docket No. 282.
United States Board of Tax Appeals
1 B.T.A. 102; 1924 BTA LEXIS 245;
November 28, 1924, decided Submitted November 17, 1924.

*245 Profits derived from sales of farming lands by a general merchant and farmer, which lands were operated by him or sold as business prudence dictated, were a part of his income derived from a trade or business within the meaning of section 201 of the Revenue Act of 1917.

M. O. Carter, Esq. for the taxpayer.
J. A. Adams, Esq. (Nelson T. Hartson, Solicitor of Internal Revenue) for the Commissioner.

JAMES

*102 Before JAMES, STERNHAGEN, TRAMMELL, and TRUSSELL.

This appeal came on for hearing November 17, 1924, upon a deficiency determined by the Commissioner for the year 1917, in the sum of $9,872.49. Oral testimony of the taxpayer was taken at the hearing.

FINDINGS OF FACT.

The taxpayer was engaged in business at Alligator, Miss., during the year 1917, as a merchant and buyer of cotton; he was engaged in the business of cotton ginning; and was engaged in the operation of 1,250 to 1,500 acres of land as cotton plantations, at or near Alligator and Merigold, Miss.

During the same year he sold one tract of land of 85 acres at Alligator, and a lease upon a tract of 80 acres, at a profit of $11,500, and at Merigold sold certain timber rights*246 at a profit of $165; 240 acres of land at a profit of $6,600; 40 acres at a profit of $4,095.62; 40 acres at a profit of $2,338; and 40 acres at a profit of $200, and received thereon a net profit, after paying expenses of sales and this manager at Merigold, of $11,441.25. The total profit from the above transactions amounted to $22,941.25, and the entire deficiency above mentioned is based upon a determination by the Commissioner that the taxpayer is subject to excess-profits tax for the year 1917 on account of the profits above stated, basing such determination upon section 201 of Title II of the Revenue Act of 1917.

The taxpayer carried on his business of farming upon the lands, the sale of which is here in question, and upon other lands, and such lands were owned and held by him for the purpose of making a profit, either from their operation or from the sale of such lands as opportunity offered.

DECISION.

The Board determines that the deficiency in tax of the said taxpayer for the year 1917 is $9,872.49, and the determination of the Commissioner is approved.

OPINION.

JAMES: It appears from the testimony and we have found as a fact that the taxpayer in this case*247 was engaged in general farming operations and realized a profit on account of the sale of some of such lands. This is clearly sufficient to bring him within the provisions *103 of section 201 of the Revenue Act of 1917, which provides that the excess profits tax shall be applied "to all trades or businesses of whatever description, whether continuously carried on or not."

The taxpayer has further requested in his petition that special relief be granted him under the provisions of section 210 of the Revenue Act of 1917. The Commissioner has pleaded in bar of such relief from this Board that the Commissioner alone has authority to grant such an application. Without determining that question in this appeal, it is sufficient to state that the taxpayer has introduced no evidence in support of that portion of his appeal and has therefore failed to sustain the burden of proof resting upon him in connection therewith.