Bidart Bros. v. United States

This action is for a refund of corporation income taxes paid for the fiscal year ending April 30, 1952, in the amount of $107,258.90 with interest thereon as provided by law.

Plaintiff corporation was lessee of several parcels of land which were used to grow a variety of crops such as hay, cotton, seed alfalfa, etcetera. The leased lands had been under lease to the plaintiff for a period in excess of six months at the time the question presented in this action arose.

During the fiscal year ending April 30, 1952, plaintiff sold its farm leases together with the unharvested crops on said lands at the same time and to the same person, to wit, Wheeler Farms, a partnership. Plaintiff also sold its harvested crops to said partnership at the same time.

In its Federal income tax return for said fiscal year plaintiff reported the sale of its leases and the unharvested crops as a single transaction and treated the entire gain from said sale as a long term capital gain.

Thereafter the Commissioner of Internal Revenue assessed a deficiency in the amount of $107,258.90 against the plaintiff. Said deficiency resulted from the Commissioner’s disallowance of capital gain treatment on that…