The opinion
APPEAL OF I. M. DAVIS.
Davis v. Commissioner
Docket No. 2616.
United States Board of Tax Appeals
2 B.T.A. 359 ; 1925 BTA LEXIS 2445 ;
July 14, 1925 , Decided Submitted June 2, 1925 .
*2445 Leslie J. Aker, Esq., for the taxpayer.
A. Calder Mackay, Esq., for the Commissioner.
GRAUPNER
*359 Before GRAUPNER, TRAMMELL, and PHILLIPS.
This appeal involves a deficiency in income tax in the amount of $755 for the calendar year 1923. The Commissioner determined that through the repossession of certain land, as set out in the findings below, the taxpayer realized a profit of $13,722.50. From this determination the taxpayer appeals.
FINDINGS OF FACT.
1. The taxpayer is an individual, a resident of the State of Oregon, whose post-office address is Drewsey.
2. In 1919 the taxpayer sold a 300-acre ranch to E. J. Howard for a total consideration of $30,000. He received $15,000 of the purchase price and accepted notes secured by a purchase money mortgage for the balance due. On this transaction the taxpayer realized a profit of $1,277.50.
3. In 1923 there remained a balance of $15,000 due on the purchase price of the ranch. The purchaser, Howard, being unable to meet the payments due, offered to reconvey to the taxpayer the entire ranch in consideration of the cancellation and surrender of the outstanding notes then due, in the *2446 sum of $15,000, and the purchase money mortgage. This offer was accepted, and by deed of conveyance from E. J. Howard the taxpayer became repossessed of the ranch.
4. During the period between the sale of the ranch in 1919 and its repossession in 1923 by the taxpayer, it depreciated greatly in value and in 1923 had a market value not in excess of $15,000.
*360 DECISION.
The deficiency determined by the Commissioner is disallowed.
OPINION
GRAUPNER: We think that the contention of the taxpayer is correct in that there would be no realized gain in the repossession of the property by the taxpayer until such time as the property might be disposed of. .