Glazer v. Commissioner
United States Tax Court
44 T.C. 541 (1965)
Herman Glazer and Forrest B. Fleisher (plaintiffs) formed a partnership, Lowell Hills (the partnership), to construct and sell 94 houses in Upper Merion Township, Pennsylvania. The profits that the partnership made were reported as ordinary income. In July 1959, Glazer and Fleisher sold their partnership shares to Marvin J. Levin for a total of $172,000. When the exchange occurred, there were 24 lots that remained unsold by Lowell Hills. However, all 24 lots were under contract to sell. The parties agreed that the contract would have been worth $6,000 less if the 24 remaining lots had not been under contract. Glazer and Fleisher reported the money they received from the sale of their partnership shares as long-term capital gain. The Commissioner of Internal Revenue (the Commissioner) (defendant) assessed a deficiency against Glazer and Fleisher. The Commissioner argued that the profits Glazer and Fleisher reported as long-term capital gain should have instead been reported and taxed as ordinary income. Glazer and Fleisher appealed.
Rule of Law
Holding and Reasoning (Raum, J.)
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