Commissioner v. Pittston Co. (252 F.2d 344, 1958)

SMITH, District Judge.

This is a petition by the Commissioner of Internal Revenue for review of a decision of the Tax Court of the United States reported in 26 T.C. 967, holding the taxpayer The Pittston Company entitled to treat the sum of $500,000 received in 1949 as consideration for the termination of an exclusive contract to purchase the output of Russell Fork Coal Company’s leased Pike County coal mines, as long term capital gain, derived from a sale or exchange within the meaning of Section 117(a) (4) of the Internal Revenue Code of 1939. The pertinent sections of the statutes are as follows:

Ҥ 22. Gross Income. (26 U.S. C.1952 ed., Sec. 22)

“(a) General Definition. — ‘Gross income’ includes gains, profits, and income derived from salaries, wages, or compensation for personal service of whatever kind and in whatever form paid, or from professions, vocations, trades, businesses, commerce, or sales, or dealings in property, whether real or personal, growing out of the ownership or use of or interest in such property; also from interest, rent, dividends, securities, or the transaction of any business carried on for gain or profit, or gains or profits and income derived from any source whatever. * * *

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Ҥ 117. Capital Gains and Losses. (26 U.S.C. 1952 ed., Sec. 117)

“(a) Definitions. — As used in this chapter—

“(1) (As amended by Sec. 115