L-R Heat Treating Co. v. Commissioner
United States Tax Court
Petitioner, on several separate occasions, borrowed certain sums of money to operate its business. On each occasion, the lender or lenders withheld certain sums of the total loan as premium for making the loan in addition to charging what was designated as 6 per cent interest on the loan. Held, the amounts withheld by the lender or lenders were in reality interest payments on borrowed capital which should be adjusted in accordance with section 433 (a) (1) (O), I. R. C. 1939.
1Opinion of the Court
OPINION.
Mulronet, Judge:
The respondent determined deficiencies in income and excess profits taxes as follows:
Fiscal year ended July SI
1951
1952 1,721. 08
1953 3,061.16
Certain adjustments were uncontested and are to be considered on a Eule 50 computation.
The narrow issue for our consideration is whether certain sums paid on 14 separate loans, each being designated by petitioner as “premium for making the loan,” were ordinary and necessary borrowing expenses, or were they, in reality, interest payments on borrowed capital which should be adjusted in accordance with section 433 (a) (1) (O).1
All…
2Cases cited6 opinions
- Deputy, Administratrix v. Du PontSupreme Court of the United States · 1940
- Commissioner v. Court Holding Co.Supreme Court of the United States · 1945
- Old Colony Railroad v. CommissionerSupreme Court of the United States · 1932
- Court Holding Co. v. CommissionerUnited States Tax Court · 1943
- Court Holding Co. v. CommissionerCourt of Appeals for the Fifth Circuit · 1944
1 more not listed; retrieve them via the Exa API.
3Cited by46 opinions
- Enoch v. CommissionerUnited States Tax Court · 1972
- Foster v. Comm'rUnited States Tax Court · 1983
- Goodwin v. CommissionerUnited States Tax Court · 1980
- Wilkerson v. CommissionerUnited States Tax Court · 1978
- Rubnitz v. CommissionerUnited States Tax Court · 1977
41 more not listed; retrieve them via the Exa API.