Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 61-42

1961-1 C.B. 751

Full Text

Rev. Rul. 61-42 /1/

The Internal Revenue Service will follow the decision of the United States Court of Appeals for the Seventh Circuit in Cedarburg Fox Farms, Inc. v. United States , 283 Fed.(2d) 711 (1960).

The court held that a fox breeder is entitled to treat gain from the sale of pelts of culled breeder animals as long-term capital gain within the meaning of section 117(j) of the Internal Revenue Code of 1939.

This decision is in accord with a prior decision by the United States Court of Appeals for the Eighth Circuit in United States v. Clement F. Cook et al. , 270 Fed.(2d) 725 (1959), involving an identical question in relation to culled breeder mink.

Inasmuch as Revenue Ruling 57-548, C.B. 1957-2, 54, holds that gain upon the sale of pelts periodically obtained from minks and other fur bearing animals held for breeding purposes for 12 months or more constitutes ordinary income and not gain entitled to treatment as long-term capital gain within the provisions of section 1231 of the 1954 Code, that Revenue Ruling is hereby revoked.

/1/ Based on Technical Information Release 302, dated February 3, 1961.