Realty Loan Corporation v. Commissioner of Internal Revenue, Realty Loan Corporation v. Commissioner of Internal Revenue
Opinion
Opinion
Goodwin, J.
The Commissioner of Internal Revenue appeals from a Tax Court decision permitting Realty Loan Corporation, an accrual-basis taxpayer, to report the income from the sale of a business on the installment basis. 54 T.C. 1083 (1970).
Realty Loan originally sought to treat the proceeds of the sale as capital gain, and has filed a protective appeal from the Tax Court decision denying capital-gain treatment. Because we affirm the decision insofar as it permitted the taxpayer to report the proceeds of the sale on the installment basis, we do not reach the question presented in the protective appeal.
Realty Loan was a closely held corporation engaged in the mortgage-banking and mortgage-servicing business. Realty Loan processed mortgage loan applications. After completing a loan, Realty Loan ordinarily assigned the note and mortgage to one of several insurance companies with whom it regularly did business. After assignment, Realty Loan serviced the mortgages as agent for the insurance companies and received a service fee. Realty Loan had agreements formalizing this relationship with Bankers Life Company and with Mutual Trust Life Insurance Company.