Strauss v. Commissioner

¶1dissenting: Under the provisions of section 44 of the Revenue Act of 1928 a taxpayer may report on the installment basis the profit from the sale of real estate where the initial payments received in cash in the year in which the sale is made do not exceed 40 percent of the selling price. In such cases it is obvious that the amount of profit to be derived from the sale is the important factor in determining whether the income therefrom shall be reported on •the installment basis. If the total profit to be realized is so small in amount as to be negligible, or there is a loss on the sale, there is no occasion to determine whether the sale is an installment sale ¡and, therefore, no occasion for an election. A total profit of $16.63 is a negligible amount. When, therefore, petitioner reported a total profit of $16.63 in her original return, it was not an election tto report an $11,000 profit on the completed transaction basis. She made no election as to how she would report the $11,000 profit until ¡she filed her amended return, a month after filing the original return, and reported such profit on the installment basis. The Commissioner should have permitted the petitioner to report the profit ¡to foe realized on the installment basis, as she had a right to do ¡under section 44, Revenue Act of 1928. (Anna D. Jamieson v. United States, Dist. Ct. of Mass., decided Nov. 26, 1935.)