In Re Estate of Grace N. Williams, Deceased. Ralph E. Williams v. Commissioner of Internal Revenue

The Tax Court determined that a growing crop of hops on July 31, 1952, at which date taxpayer acquired it as a liquidating dividend, was of the fair market value of $11,500.00. I.R.C.1939, sec. Ill (a, b), 26 U.S.C.A. § 111 (a, b). Timely petition for review of the decision was filed in this Court.

The Eola Hop Farms were operated by Grace N. Williams, since deceased, as sole proprietor from some date in 1950 to March 1,1951, when the assets and liabilities were transferred to Eola Hop-Farms, Inc., a corporation, in exchange-for all the capital stock thereof. This corporation operated from the last date until July 31,1952, when it was dissolved by vote of stock of decedent. Thereafter, farming operations were carried on by decedent as a sole proprietorship. The growing crop of hops was transferred to decedent while not matured, but for all practical purposes no risk of loss by mildew or other crop diseases existed. Decedent operated through the harvest and sale of the crop. In 1953, the hop vines were pulled up and hop growing abandoned. The growing of hops had been less and less profitable since 1950, owing largely to the allocations of salable-percentages by the Secretary of…