Brief Fact Summary. Petitioner leased property for 10 years at $30,000 per year. The lessee agreed to pay $30,000 in advance for the last year of the lease. Petitioner did not include this amount in his gross income.
Synopsis of Rule of Law. Income is includable in gross income in the year received.
Issue. Whether the $30,000 advance payment received in 1949 is gross income in 1949, or in 1959 when the payment is to be applied as rent?
Held. Judge Black issued the opinion for the Tax Court of the United States in affirming the Commissioner and holding that the amount is income for the year in which it was received.
Discussion. The Tax Court noted that the amount received by Petitioner was not a security deposit, which may have led to a different decision. Rather in this case, the payment was a pre-payment of rent, and Petitioner had full use and control of the money during the tax year in which it was received.