District of Columbia, Petitioner, v. Ben Lar Associates et al., Respondents, 261 F.2d 376 (D.C. Cir. 1958)

The four respondents, two of whom are dentists, the other two being in the liquor business, sold as a unit certain properties in the District of Columbia, title to which they had acquired and held as tenants in common. The net proceeds from the sale were distributed directly to each individual taxpayer, and each taxpayer reported his individual share of profit on his income tax return and paid a tax thereon.

The Assessor determined that gain from the sale had been received by the individuals as members of a group conducting an "unincorporated business."¹  Franchise taxes accordingly were assessed and collected from the respondent individuals. The District of Columbia Tax Court, however, found that the net amount of $4,352.10 had been erroneously assessed and collected, and that the individual respondents were entitled to refund of the amounts so collected with interest at 4 per cent per annum from March 7, 1957 to the date of payment of the refund. The District of Columbia appealed.

We are satisfied upon consideration of the record as a whole that the Tax Court might properly conclude from the nature of the acts of the individuals and their conduct in relation to the property that the gain from its sale was received by the respondents as four individuals and not by an unincorporated business. Compare District of Columbia v. Pickford, 1949, 86 U.S.App.D.C. 17, 18, 20, 179 F.2d 271, 272, 274.

Affirmed.