Marshall

Plaintiff sues to recover an amount of $16,076.36, together with interest, on account of an alleged overassessment of income tax for the calendar year ending De cember 31, 1928. The dispute between the taxpayer and the United States arose because of the Government’s claim that plaintiff had realized a larger profit by reason of the sale of real property during the year 1928 than the amount returned by her.

In the month of June, 1928, plaintiff made a sale of real property for a total consideration of $219,000, receiving oil account of the purchase price the sum of $25,000. Conveyance was made and promissory note and mortgage was taken back by the plaintiff from the vendee for the balance of the purchase price, the note being payable ten years after date with interest semiannually. In her income tax return for the year 1928 the sale was reported as on the installment basis and accounted for the $25,000 initial payment received. On the 10th of October, 1928, plaintiff transferred the note and mortgage to a Los Angeles bank to be held by it under the terms and provisions of an express declaration of trust executed by the plaintiff. The trustee, by the terms of the trust instrument,…