Millinery Center Building Corp. v. Commissioner of Internal Revenue

No. 255. Millinery Center Building Corp. v. Commissioner of Internal Revenue. Bernard Weiss for petitioner. Solicitor General Sobeloff, Assistant Attorney General Holland, Ellis N. Slack, A. F. Prescott and Louise Foster for respondent. [MAJORITY] Petition for writ of certiorari to the United States Court of Appeals for the Second Circuit granted limited to questions 1 and 2 presented by the petition for the writ which read as follows: “1. Where a lessee, the owner of a valuable building on leased land, acquires the fee to the land to be relieved of what it considers to be the burdensome terms of a lease, may the lessee* deduct the excess of the payment over the determined value of the land at the date of purchase as an ordinary expense of doing business under § 23 (a) of the United States Internal Revenue Code of 1939 or under § 23 (f) as a loss on a transaction entered into for profit and not compensated for by insurance or otherwise. “2. In the alternative, may the lessee-petitioner consider the excess payment over the determined value of the land to be in the nature of a prepayment of rent for the remaining term of the extinguished lease and amortize such amount over 21 years?”