Harold F. Smith and Gertrude Smith, Petitioners, v. Commissioner of Internal Revenue, Respondent, 338 F.2d 627 (5th Cir. 1964)

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US Court of Appeals for the Fifth Circuit - 338 F.2d 627 (5th Cir. 1964) November 27, 1964

R. M. Ginsberg, Dallas, Tex., Lefkowitz, Green, Ginsberg, Eades & Gilmore, Dallas, Tex., for petitioners.

Edward L. Rogers, Atty., Louis F. Oberdorfer, Asst. Atty. Gen., Dept. of Justice, Charles S. Casazza, Atty., Sheldon S. Cohen, Chief Counsel, I. R. S., Lee A. Jackson, Atty., Meyer Rothwacks, Morton K. Rothschild, Dept. of Justice, Washington, D. C., for respondent.

Before TUTTLE, Chief Judge, and BROWN and GEWIN, Circuit Judges.


Although this Court has on occasion differed with the Tax Court in determining whether sales by a taxpayer of parcels of real estate are sales of property held primarily for sale to customers in the ordinary course of trade or business, see Smith v. Commissioner of Internal Revenue, 5 Cir., 232 F.2d 142, the record in this case does not warrant such disposition. The inferences drawn by the Tax Court were fully warranted by the evidence including considerable oral testimony. The fact determinations thus made may not be set aside unless clearly erroneous. This they are not.

We need not decide whether the houses which were rented while being held "for sale" were subject to depreciation. The Commissioner allowed depreciation on a straight line basis on a 33 1/3 year life. This was not disturbed by the Tax Court. Its determination to permit this item to stand is not appealed by the Commissioner. We therefore also let it stand. The decision of the Tax Court is affirmed.