First Nat'l Bank v. Commissioner
United States Tax Court
For business reasons, petitioner created a wholly owned subsidiary mortgage company to which it loaned funds for use in making loans for home purchases and construction.
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For business reasons, petitioner created a wholly owned subsidiary mortgage company to which it loaned funds for use in making loans for home purchases and construction. Petitioner filed consolidated returns with the mortgage company for 1974 and 1975. In these returns, petitioner elected to take its bad debt deduction under the reserve method authorized by sec. 166(c), I.R.C. 1954, and to compute its additions to its bad debt reserve under the percentage method authorized by sec. 585(b)(2), I.R.C. 1954. Petitioner included its loans to the mortgage company in its base for computing its 1974…
1Opinion of the Court
Featherston, Judge:
Respondent determined deficiencies in the amounts of $33,993 and $1,450 in petitioner’s Federal income tax for 1974 and 1975, respectively. Other issues having been resolved by the agreement of the parties, the only one remaining for decision is whether petitioner, a national bank, may include loans outstanding to its wholly owned subsidiary, a mortgage company, at the ends of the years before the Court in its loan base for purposes of computing the additions to its bad debt reserve to be deducted on consolidated Federal income tax returns filed with the subsidiary under…
2Cases cited16 opinions
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- Graff v. CommissionerUnited States Tax Court · 1980
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