Black Gold Energy Corp. v. Commissioner
United States Tax Court
T, an accrual basis taxpayer, guaranteed certain indebtedness of X Co. During 1984, X Co. defaulted on its obligations, and two of X Co.'s creditors filed suit against T to recover under T's guaranties of X Co.'s indebtedness. In January 1985, T and the creditors entered into settlement agreements. Pursuant to the agreements, in 1985, T made an $ 850,000 payment to one creditor and delivered a $ 3,850,000 note to another creditor.
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T, an accrual basis taxpayer, guaranteed certain indebtedness of X Co. During 1984, X Co. defaulted on its obligations, and two of X Co.'s creditors filed suit against T to recover under T's guaranties of X Co.'s indebtedness. In January 1985, T and the creditors entered into settlement agreements. Pursuant to the agreements, in 1985, T made an $ 850,000 payment to one creditor and delivered a $ 3,850,000 note to another creditor. During 1985, T made a $ 50,000 payment on the note. 1. Held, T did not sustain a bad debt loss in 1984. 2. Held, further, in 1985, T is only entitled to deduct as a…
1Opinion of the Court
Black Gold Energy Corporation, Petitioner v. Commissioner of Internal Revenue, Respondent
Black Gold Energy Corp. v. Commissioner
Docket No. 783-89
United States Tax Court
99 T.C. 482; 1992 U.S. Tax Ct. LEXIS 78; 99 T.C. No. 24;
October 15, 1992, Filed
Decision will be entered for respondent.
T, an accrual basis taxpayer, guaranteed certain indebtedness of X Co. During 1984, X Co. defaulted on its obligations, and two of X Co.'s creditors filed suit against T to recover under T's guaranties of X Co.'s indebtedness. In January 1985, T and the creditors entered into settlement agreements. Pursuant to…
2Cases cited12 opinions
- Putnam v. CommissionerSupreme Court of the United States · 1956
- Eckert v. BurnetSupreme Court of the United States · 1931
- Crown v. CommissionerUnited States Tax Court · 1981
- Benjamin A. Stratmore and Helen Stratmore v. United StatesCourt of Appeals for the Third Circuit · 1970
- Martin v. CommissionerUnited States Tax Court · 1969
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