Archie P. Sherar and Terry A. Sherar v. United States

Archie P. Sherar and Terry A. Sherar, appellants herein, after the denial of their claim for a tax refund timely filed this action therefor in the United States District Court for the Northern District of California. That court on January 23, 1968, granted the government’s motion for summary judgment. A timely appeal was taken to this court. We affirm.

The facts show that the parents of appellant Archie P. Sherar owned and oper ated a gift shop in Spokane, Washington, from 1953 to January 17, 1967. During that period the senior Sherars purchased certain store fixtures and equipment, and used them in the operation of the gift shop. The senior Sherars listed the gift shop for sale in March, 1963. From then until about December 31, 1966, the parents were attempting to sell the gift shop. On July 1, 1964, appellant Terry A. Sherar purchased the store fixtures and equipment of the gift shop from the senior Sherars, and on the same day leased the store fixtures and equipment back to the parents. The sale and leaseback transaction was entered into by them to broaden the market for potential buyers of the gift shop.

After the sale and lease-back transaction had been made, the senior…