Jeanese, Inc. v. United States

This is an action for refund of an alleged overpayment of Federal income taxes, paid on behalf of the now dissolved taxpayer, Jeanese, Inc. (“Jeanese”), for the fiscal period commencing February 1, 1957, and ending January 16, 1958. The amount of overpayment is alleged to be the sum of $28,667.04.

The facts have been largely stipulated to between the parties.

In 1953, Frank Crist and three other individuals formed a partnership and acquired King Ranch, a parcel of land of approximately 90 acres near Los Altos, California. The partnership, later increased to thirteen individuals, intended to subdivide the entire parcel, to sell the resultant lots, and to acquire and subdivide additional land in the area. To permit gradual development of King Ranch, it was divided into four arbitrary units, known as Mentone 1, Mentone 2, Mentone 3, and Mentone 4. Mentone 1 and 2 were the first two units subdivided, and the partnership sold a total of 62 of the 108 lots in those units prior to incorporation of Jeanese.

Early in 1955, the partnership filed a tentative subdivision map with the Santa Clara County Engineer, showing the development of Mentone 3 and 4 as a single unit. The plan was…