Having disposed of two of petitioner's alternatives, we now consider whether his remaining alternative— capital gain— is the proper characterization for the $22,500. We note in passing that Ralph A. Boatman, 32 T.C. 1188 (1959); Emily B. Harrison, 7 T.C. 1 (1946); Doyle v. Commissioner, 39 B.T.A. 156 (1935), and certain Memorandum Opinions of this Court cited by respondent in support of his contention of ordinary income are distinguishable on the ground that no sales occurred therein See Estate of James M. Shannonhouse, 21 T.C. 422, 424 (1953). The amount of the gain is not in issue.

The fact remains that what petitioner retained, namely the $12,000 was liquidated damages for the vendee's default in performing the contract. While a vendor of real estate, in case of default by the vendee, can elect one of several remedies, it is quite obvious that the vendor in this case accepted the $12,000 as liquidated damages which was his right under the contract. Such liquidated damages are taxable as ordinary income. A. M. Johnson, 32 B.T.A. 156; see also Emily B. Harrison, 7 T.C. 1; Doyle v. Commissioner, 110 F.2d 157. In the Johnson case this Court said:

The Commissioner's determination that the full amount of the award was income taxable to her in that year was sustained by this Court. To the same effect are Commissioner v. Lewis (C.C.A., 3d Cir.), 141 Fed.(2d) 221, and Emily B. Harrison, 7 T.C. 1. Recognizing these and other decisions as adverse, petitioner invites reconsideration, stressing that the distributions here in controversy were ordered paid from principal; that they were never net income to the trusts; and that ‘to turn principal into income by virtue of a bookkeeping entry‘ is ‘to pull taxable income literally out of thin air.‘ This argument was discussed and rejected by the Circuit Court of Appeals for the Second Circuit in Johnston v. Helvering, 141 Fed.(2d) 208, and we adhere to that decision.

* * * To the same effect is Emily B. Harrison, 7 T.C. 1. So here, we can not say that if petitioner had requested in 1939 and 1940 the amounts on which the Commissioner seeks to tax her, the trustee could have been forced to pay them, and if she had successfully brought suit, the year of the order awarding her the income would have fixed the year of her liability for tax. The possibility that she might have won is not sufficient to support a tax.

There was no extended discussion, however, of the precise question which is troubling us here. The only treatise which we have found which mentions the question is Bogart, Trusts and Trustees, Sec. 819, which, in one sentence, states the holding of Eager v. Pollard, supra, and cites only that case. The case of Emily B. Harrison, 7 T.C. 1, is not squarely in point, since it has to do with nonproductive property of a Pennsylvania trust. In that case an amount was forfeited by a defaulting purchaser of real estate from a trust in 1937.