McConway & Torley Corp. v. Commissioner
United States Tax Court
Petitioner's sole stockholder canceled indebtedness owing by petitioner to it, including interest accrued by petitioner upon its books. Held, the amount of such interest did not constitute income taxable to the petitioner. Helvering v. American Dental Co., 318 U.S. 322. Held, further, that the petitioner was not entitled to deduct interest so forgiven, which had been accrued during the taxable year prior to the forgiveness of debt.
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Petitioner's sole stockholder canceled indebtedness owing by petitioner to it, including interest accrued by petitioner upon its books. Held, the amount of such interest did not constitute income taxable to the petitioner. Helvering v. American Dental Co., 318 U.S. 322. Held, further, that the petitioner was not entitled to deduct interest so forgiven, which had been accrued during the taxable year prior to the forgiveness of debt. Held, further, that the petitioner being upon the accrual basis, and not having applied to current interest a payment of interest made during the taxable year, it…
1Opinion of the Court
OPINION.
Disney, Judge:
This proceeding, since the filing of a second amended petition, involves income tax for the calendar year 1936, as to which the Commissioner determined a deficiency of $2,725.69; and income and excess profits taxes for 1937, as to which deficiencies of $26,313.86 and $17,204.17, respectively, were determined by the Commissioner. After the hearing and the filing of brief upon the issues originally tendered, and after the passage of section 501 of the Revenue Act of 1942, petitioner asked and was given permission to claim the benefit of that section. Thereafter, the…
2Cases cited4 opinions
- Helvering v. American Dental Co.Supreme Court of the United States · 1943
- Pancoast Hotel Co. v. CommissionerUnited States Tax Court · 1943
- Shellabarger Grain Products Co. v. CommissionerUnited States Tax Court · 1943
- George Hall Corp. v. CommissionerUnited States Tax Court · 1943
3Cited by18 opinions
- Putoma Corp. v. CommissionerUnited States Tax Court · 1976
- Putoma Corp., Successor by Merger of Pro-Mac Company, Petitioners- Cross-Appellants v. Commissioner of Internal Revenue, Cross-AppelleeCourt of Appeals for the Fifth Circuit · 1979
- Lincoln Storage Warehouses v. CommissionerUnited States Tax Court · 1949
- Chicago, Milwaukee, St. Paul and Pacific Railroad Company v. The United StatesUnited States Court of Claims · 1968
- Hartland Assoc. v. CommissionerUnited States Tax Court · 1970
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