whether realty was held "primarily for sale in the ordinary course ... of trade or business" is a question of fact arguably mixed with law, subject to the "clearly erroneous" standard of review
How later courts described this case
- whether realty was held "primarily for sale in the ordinary course ... of trade or business" is a question of fact arguably mixed with law, subject to the "clearly erroneous" standard of review
- in deciding the purpose for which the taxpayer held property, the court considered the holding purpose of the taxpayer's shareholders' father, from whom the shareholders inherited the property
- question of fact mixed with law
- using section 1221(1) to help construe the meaning of section 543(b)(3)
Written by the judges who cited it.
The opinion
PREGERSON, District Judge,
concurring:
Whether taxpayers’ real property was “held primarily for sale to customers in the ordinary course of [taxpayers’] trade or business” within the meaning of 26 U.S.C. § 543 (b)(3) is a question of law, see Estate of Franklin v. Commissioner, 544 F.2d 1045, 1047, n. 3 (9th Cir. 1976), to which the “clearly erroneous” rule should be inapplicable. Winthrop v. Commissioner, 417 F.2d 905, 910 (5th Cir. 1969).
While referring to the “clearly erroneous” standard, Ninth Circuit cases such as Austin v. Commissioner, 263 F.2d 460 (1959), still carefully analyze the facts in light of the applicable law. This careful analysis, in effect, amounts to a de novo review of the Tax Court’s legal conclusion.
I vote to reverse because an analysis of the facts of this case in light of the applicable law reveals that the Tax Court reached an incorrect legal conclusion.