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"Primarily For Sale" In I.R.C Sections 1221 And 1231 Held To Mean "Principally For Sale" Rather Than "Substantially For Sale" --Malat V. Riddell (U.S. 1966), Michigan Law Review
"Primarily For Sale" In I.R.C Sections 1221 And 1231 Held To Mean "Principally For Sale" Rather Than "Substantially For Sale" --Malat V. Riddell (U.S. 1966), Michigan Law Review
Michigan Law Review
Sections 1221 and 1231 of the Internal Revenue Code disqualify from capital gains treatment profits derived from the sale or exchange of property "held by the taxpayer primarily for sale to customers in the ordinary course of his trade or business." In deciding whether these sections deny capital gains treatment to profits realized by real estate dealers from the sale or exchange of land, the circuit courts, while examining similar facts in relation to the same criteria, have reached divergent conclusions. Two recent decisions, Municipal Bond Corp. v. Commissioner and Malat v. Riddell, illustrate these discordant results. In Municipal …