Lena M. Anderson v. Commissioner of Internal Revenue

Oh this appeal from a Tax Court judgment finding an income tax deficiency, we affirm in part and remand for a minor correction.

The self-employed taxpayer derives her income from investments in real estate and corporate stocks. On her 1967 tax return, she took deductions for expenses associated with her management duties, for state property taxes and she reported a long-term capital gain from a sale of stock. The Commissioner having determined that a tax deficiency existed, Ms. Anderson petitioned the Tax Court for a re-determination.

That court sustained the Commissioner’s determination that the stock sale should have been reported as a short-term capital gain, not long-term. We agree because the taxpayer had not held the stock for more than six months. The date of purchase is not included in determining the holding period. The period ends on the date of sale, the trade date, and not the settlement date as taxpayer contends.

The taxpayer’s deduction of $500 for maintaining an office in her home was challenged and reduced by the Commissioner to $112, based on a computation of the number of square feet in the home and the portion used as an office. The Tax Court…