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1000 Friends of Oregon v. McPherson
89-1 USTC 9217, 63 AFTR2d 89-563 (D. Oreg. 1988)
1000 Friends of Oregon, Oregon Small Woodlands Association, Washington Farm Forestry Association, Forest Landowners of California, and National Woodland Owners Association, Plaintiffs v. M. Peter McPherson, acting in his official capacity as Secretary of the Treasury of the United States, and Lawrence B. Gibbs, in his official capacity as Commissioner of the Internal Revenue Service of the United States, Defendants U.S. District Court, Dist. Ore., Civ. CV 88-0702-PA, 12/20/88
Assessment and collection: Injunction: Anti-Injunction Act: Irreparable
harm: Timber property: Passive activity loss regulations.--An action by
timber associations seeking an injunction that would require the IRS to
prepare an environmental impact study and to obtain court approval before
adopting passive activity loss regulations was barred by the
Anti-Injunction Act. The action questions the validity of a treasury
regulation and affects the assessment and collection of taxes. The
associations argued that they would not be considered as materially
participating in timber operations, currently incurred timber expenses
would not be recovered for 40 to 80 years when income is received from a
timber harvest, and members would have to convert property to nontimber
uses or discontinue necessary annual expenditures to the detriment of the
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Lumber Co. v. Commissioner
20 T.C. 192 (1953); Acq. 1953-2 C.B. 5.
The taxpayer exchanged timberland for the right to cut and remove
standing timber from other lands. The agreement of exchange required the
taxpayer to complete the cutting of the timber within a specified period.
In connection with its liability in subsequent years, the taxpayer
contended that the transaction was taxable and did not qualify as a
nontaxable exchange of like-kind property under section 112 (b) (1). The
Commissioner contended that a nontaxable exchange occurred in the
Corp. v. Commissioner
2 T.C.M. 475; P-H T.C. Memo ¶43,356 (1943).
Standing timber killed by a crown fire but still merchantable was
attacked by insects and fungi before being cut. The taxpayer claimed no
deduction for loss in the year of the fire but did claim deductions in
later years for the subsequent damage by insects and fungi. The
Commissioner contended that a 75% loss in value resulted from the fire and
allowed a correspondingly lower basis for computing the insect and fungi
loss deductions and for determining depletion.
Ouderkirk v. Commissioner
36 TCM 526, Tax Ct. Mem. Dec. (CCH) 13,385(M), (P-H) ¶ 77,120 (1977)
Capital gains and losses: Capital asset defined: Sale of timberland:
Capital asset v. property used in trade or business.--A tract of
timberland sold by an individual was property held for investment and
constituted a capital asset within the meaning of Code Sec. 1221 , rather
than property used in his trade or business.
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