Walburga Oesterreich v. Commissioner of Internal Revenue

This case is here on petition to review .a decision of the Tax Court relating to a (deficiency assessment. The following facts are not in dispute.

Petitioner, Walburga Oesterreich, acquired three adjoining lots, 552, 553 and •'554, in January, 1926. One of the lots ■was on the corner of Wilshire Boulevard •.and Hamilton Drive in Beverly Hills, 'California.

Wilshire Amusement Corporation was .'incorporated in 1929 by Albert H. and Albert J. Chotiner, father and son, for ■.the purpose of building a motion picture •theatre. They directed a real estate .broker, operating in Beverly Hills, to find a suitable location which they could lease and on which they could construct a theatre. The broker learned from Wal-burga that she would be willing to enter into a lease for the three vacant lots which she owned and he arranged a meeting between the Chotiners and Walburga. After negotiations, Walburga •and Wilshire Amusement Corporation ■entered into an agreement entitled “lease” dated September 11, 1929. The ■Chotiners decided, in the course of the .negotiations, that additional land would ibe needed for the theatre which they desired to build and for that reason Wil-shire Amusement…