Churchill

This is an action for the refund of federal income taxes paid for the period January 1, 1930, to April 9, 1930, by the plaintiff executors on behalf of their testatrix, under applicable provisions of the Revenue Acts of 1926 and 1928, respectively.

The cause has been submitted upon an agreed statement of facts. They may be epitomized as follows:

Alice E. Burton died April 9, 1930. Pri- or to March 1, 1913, she owned real property in Rochester, N. Y. The cost of such property to her on March 30, 1925, was $69,725.85. Upon that date she entered into a contract for the sale of the property for a total consideration of $220,000. She gained a net profit on account of the contract of $150,274.15. The agreement of sale provided that the purchase price was to be met as follows: $50,000 cash on March 30, 1925; $25,000 cash on March 30, 1926, and March 30, 1927, respectively. The seller was to deposit a warranty deed to the property in escrow when the first $100,000 of the purchase price was paid in cash. The buyer was to give a bond and mortgage for the $120,000 balance when the deed was delivered to him. The deed was executed April 22, 1926, and deposited in an escrow May 17, 1926,…