Quimbee logo
DMCA.com Protection Status
From our private database of 18,300+ case briefs...

Biedenharn Realty Co., Inc. v. United States

United States Court of Appeals for the Fifth Circuit
526 F.2d 409, cert. denied, 429 U.S. 819 (1976)


Biedenharn Realty Company, Inc. (Biedenharn) (plaintiff) was formed to hold and manage family investments, including commercial and residential real estate, farm properties, and a substantial stock portfolio. Biedenharn acquired a 973-acre property as a farming investment. Biedenharn farmed the property and leased some of it to farmers. After being approached by buyers interested in building homes on the property, Biedenharn subdivided the land and sold the resulting lots. Biedenharn improved the property with streets, water, sewer, and electricity, and hired brokers to market the lots. Biedenharn continued to farm a large part of the land while the lots were being sold. Biedenharn listed $254,409.47 in real-estate profits on its federal tax returns for 1964, 1965, and 1966. Biedenharn listed 60 percent of the gain as ordinary income and 40 percent as capital gains. The United States Internal Revenue Service (IRS) (defendant) later determined that Biedenharn’s profits were entirely ordinary income and thus assessed additional taxes and interest. Biedenharn sued the IRS for a refund of $32,006.86, claiming that the entire profit represented capital gains. The district court agreed with Biedenharn’s characterization. The IRS appealed, arguing that Biedenharn has become a business that holds property to sell to customers in the ordinary course of its trade, and Biedenharn must therefore treat any gains as ordinary income.

Rule of Law


Holding and Reasoning (Goldberg, J.)

Dissent (Gee, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 486,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.

  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students. Read more about Quimbee.

Here's why 486,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 18,300 briefs, keyed to 985 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.

Questions & Answers

Have a question about this case?

Sign up for a free 7-day trial and ask it

Sign up for a FREE 7-day trial