Longview Hilton Hotel Co. v. Commissioner
United States Tax Court
Petitioner in 1941 obtained a loan, secured by mortgage on its hotel property. For services in securing the loan it paid fees to brokers. Pursuant to the requirement of the revenue agent, it amortized these fees over the life of the loan and in its returns for the fiscal years 1941, 1942, and 1943 took pro rata deductions.
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Petitioner in 1941 obtained a loan, secured by mortgage on its hotel property. For services in securing the loan it paid fees to brokers. Pursuant to the requirement of the revenue agent, it amortized these fees over the life of the loan and in its returns for the fiscal years 1941, 1942, and 1943 took pro rata deductions. At the close of its fiscal year 1944 petitioner was dissolved and its assets were distributed in kind to its then stockholders, who assumed the liability for the unpaid portion of the original loan. Held, petitioner is entitled to deduct the remaining unamortized portion of…
1Opinion of the Court
OPINION.
Arundell, Judge:
Both parties are agreed that it was proper for petitioner to amortize the brokerage fees and commissions paid for services in securing the mortgage loan of $167,000. This practice appears to be in accord with a long established rule.' It was early held that bond discount was in the nature of interest expense accruing ratably during the term for the use of borrowed money and should therefore be amortized and deducted proportionately over the life of the bonds. Chicago, Rock Island & Pacific Railway Co., 13 B. T. A. 988, 1031; United States Playing Card Co., 15 B. T. A.…
2Cases cited1 opinion
- Plaza Inv. Co. v. CommissionerUnited States Tax Court · 1945
3Cited by26 opinions
- Enoch v. CommissionerUnited States Tax Court · 1972
- United States v. Midland-Ross Corp.Supreme Court of the United States · 1965
- Johnsen v. CommissionerUnited States Tax Court · 1984
- Buddy Schoellkopf Products, Inc. v. CommissionerUnited States Tax Court · 1975
- Fort Howard Corp. v. CommissionerUnited States Tax Court · 1994
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