United States v. Fred D. Temple

COLEMAN, Circuit Judge:

In this appeal we are concerned with a controversy between the Government and the Taxpayer as to whether the profits from certain real estate transactions were taxable as capital gains or as ordinary income derived from the sale of property held primarily for sale to customers in the ordinary course of business. After full hearing, the District Court found and held that the aforesaid profits should be treated as capital gains.

The Government seeks to overturn that judgment on the ground that it “lacks a reasonable basis in the facts of record, is contrary to the whole purport of the capital gains provisions, and results from the application of an erroneous legal standard to the evidence”. Stating it another way, the Government further contends that whether the District Court’s ultimate findings be deemed a determination of fact, or of law, or of mixed law and fact, or ultimate fact springing from undisputed evidentiary facts, it is clear that the determination is not supported by the facts nor the law, and should, therefore, be reversed.

Upon a careful consideration of the entire record, and after hearing argument of counsel, we cannot confidently agree with these contentions.

About the best that can be said of these capital gains controversies is that each case must be decided on its own peculiar facts. Thompson v. Commissioner of Internal Revenue, 5 Cir., 322 F.2d 122. There is not much dispute, if any, about the facts. The real issue is that the Government disagrees with the inferences and conclusions which the trial court drew from the facts. The record reveals about seventeen facts or factual inferences in support of the findings below. There are about ten facts or factual inferences which could have supported a finding for the Government. Thus we see a situation in which the Court below could have decided either way without being clearly in error.

In this state of the record we find no legal justification for reversal and the judgment is

Affirmed.