Burnet v. S. & L. Building Corp.
288 U.S. 406 (1933)

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U.S. Supreme Court

Burnet v. S. & L. Building Corp., 288 U.S. 406 (1933)

Burnet v. S. & L. Building Corp.

No. 475

Argued February 10, 1933

Decided March 13, 1933

288 U.S. 406

Syllabus

Under § 212(d) of the Revenue Act of 1924, where real estate is sold on the installment plan and the initial payments do not exceed one-fourth of the purchase price, the vendor is permitted, under regulations to be prescribed by the Commissioner with the approval of the Secretary, to return as income in any taxable year that proportion of the installment payments "actually received" in that year which the total profit realized, or to be realized when the payment is completed, bears to the total "contract price."

Held:

Page 288 U. S. 407

1. That a Treasury regulation providing that, as to property sold subject to an existing mortgage payable in installments which the purchaser assumes, the amount of such mortgage, "to the extent that it does not exceed the basis to the vendor of the property sold," shall be included as part of the purchase price in finding the vendor's profit, but shall not be considered as part of the initial payments or of the total "contract price," is a valid application of the statute. P. 288 U. S. 412

2. An excess of the assumed mortgage over the base or depreciated cost of the property to the vendor was properly treated as if received in money by the vendor in the year of sale. P. 288 U. S. 414.

60 F.2d 719 reversed.

Certiorari, 287 U. S. 93, to review the reversal of a ruling of the Board of Tax Appeals, 19 B.T.A. 788, sustaining deficiency income tax assessments.

Page 288 U. S. 408

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