Rice v. Commissioner
United States Tax Court
T.C. Memo. 2009-142 (2009)
Facts
Bruce and Donna Rice (plaintiffs), a couple who owned a business that managed retirement plans, purchased a large, undeveloped lot on which to build a house. After purchasing the lot, the Rices decided to subdivide the land into eight additional lots for homes. The Rices hired consultants to guide them through the construction of their home and to help them with zoning, access, water and sewage services, and environmental considerations for the benefit of their property and the subdivision as a whole. The additional lots were sold slowly and through word of mouth to friends, acquaintances, and family members. The Rices listed the money they received from the sale of the additional lots on their income-tax returns as capital gain. The Commissioner of Internal Revenue (the Commissioner) (defendant) determined that the money from the sales was ordinary income. The Commissioner argued that the Rices had held their property primarily for sale to customers in the ordinary course of their business, and therefore, the property was not a capital asset that realized capital gain. The Rices petitioned the United States Tax Court for a redetermination.
Rule of Law
Issue
Holding and Reasoning (Kroupa, J.)
What to do next…
Here's why 709,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 44,500 briefs, keyed to 983 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.
