
    M. L. Elken, Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 4645.
    Promulgated August 25, 1927.
    Sale of land held to be a sale on the installment basis.
    
      Henry Leum, Esq., for the petitioner.
    
      James A. O’dallaghan, Esq., for the respondent.
    This is a proceeding for the redetermination of a deficiency in income tax for the year 1920 in an amount less than $10,000. The question in issue is the amount of profit realized by the petitioner in 1920 from the sale of a parcel of real estate under the facts below stated.
    FINDINGS OP PACT.
    On December 10, 1919, the petitioner sold to one Ole Ferguson through a land broker certain farm lands for the sum of $88,400 and on that date the land broker received a payment of $2,000; on March 1,1920, the balance of the first payment was made, $8,000; on March 1, 1922, payment was to be made of $10,000; on March 1, 1923, payment was to be made of $2,900; on March 1, 1924, payment was to be made of $3,000; and the balance of $12,500 was to have been paid in annual payments of $2,500.
    The total consideration was to have been $38,400, of which the land broker withheld as commission $2,680, leaving the net consideration of sale $35,720. The cash payment received by the petitioner from the land broker was $10,000, less the land broker’s commission of $2,680, or $7,320, which was less than 25 per cent of the net consideration of the sale price to be realized by the petitioner.
    The petitioner was to furnish a good and sufficient warranty deed to the purchaser as soon as $20,000 had been paid under the contract.
   OPINION.

Smith:

The respondent determined the deficiency in this case upon the theory that the sale took place on March 1, 1920, and that there was a down payment of $10,000 which was in excess of 25 per cent of the selling price. At the hearing it was stipulated by the parties that the sale took place on December 10, 1919, and that the first payment was only $2,000, and that the tax for 1920 should be recomputed on the theory that the sale was on the installment or deferred-payment plan.

Judgment will be entered on 15 days' notice, under Rule 50.

Considered by Littleton.  