Lucas v. North Texas Lumber Co., 281 U.S. 11 (1930)

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Lucas v. North Texas Lumber Company

No. 92

Argued January 15, 16, 1930
Decided February 24, 1930
281 U.S. 11

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE FIFTH CIRCUIT

Syllabus

An option offered by one corporation to another to buy lands at a specified price was accepted late in 1916 by a notice from the vendee, in which it declared itself ready to close the transaction and pay the price as soon as the transfer papers were prepared by the vendor. The vendor did not prepare the papers, transfer or tender title or possession, or demand or receive the purchase price, until early in 1917, when the transaction was closed. Held that, as unconditional liability of the vendee was not created in 1916, the vendor, though it kept its accounts on the accrual basis, was not entitled under § 13(d) of the 1916 Revenue Act to enter the purchase price as income of that year and to make return and have the tax computed on that basis, which clearly did not reject 1916 income. P. 13.

30 F.2d 680 reversed.

Certiorari, 280 U.S. 538, to review a judgment of the circuit court of appeals which reversed an order of the Board of Tax Appeals, 7 B.T.A. 1193, sustaining a finding of the Commissioner of Internal Revenue.