New McDermott, Inc. v. Commissioner
United States Board of Tax Appeals
Petitioner corporation was organized by a committee of bondholders subsequent to default of interest on the bonds. The bonds had been issued in connection with a mortgage on real property. The real property was conveyed to petitioner, subject to the mortgage securing the bonds, by a corporation which had acquired the property subject to the mortgage at a sheriff's sale. Petitioner keeps its books and files its returns on the accrual basis.
Read the full summary
Petitioner corporation was organized by a committee of bondholders subsequent to default of interest on the bonds. The bonds had been issued in connection with a mortgage on real property. The real property was conveyed to petitioner, subject to the mortgage securing the bonds, by a corporation which had acquired the property subject to the mortgage at a sheriff's sale. Petitioner keeps its books and files its returns on the accrual basis. No interest was paid on the bonds from the time petitioner acquired the property until after the taxable year. In the taxable year petitioner accrued on…
1Opinion of the Court
*1040OPINION.
Hill:
The single issue before us is whether or not petitioner is entitled to a deduction in the taxable year for interest accrued on bonds. Petitioner contends that it has always kept its books and filed its returns on the accrual basis and that it properly accrued the sum of $9,730 as interest on the bonds due in the year 1936. It maintains that, even though it was not primarily liable on the mortgage, it is entitled to the deduction by virtue of article 23 (b)-l of respondent’s Regulations 94.1 Eespondent argues that petitioner was not on the accrual basis of accounting and hence may…
2Cases cited1 opinion
- Anderson v. StarrWashington Supreme Court · 1930
3Cited by7 opinions
- Guardian Investment Corporation v. Robert L. Phinney, District Director of Internal RevenueCourt of Appeals for the Fifth Circuit · 1958
- Smith v. CommissionerUnited States Tax Court · 1985
- Commissioner of Internal Revenue v. BreyerCourt of Appeals for the Third Circuit · 1945
- Amundson v. CommissionerUnited States Tax Court · 1990
- New McDermott, Inc. v. CommissionerUnited States Board of Tax Appeals · 1941
2 more not listed; retrieve them via the Exa API.