Couchman v. Commissioner
United States Board of Tax Appeals
Petitioner borrowed money from his father's estate with the consent of his brother, who imposed a condition that he share in any profit from the ownership of the stock exchange seat which petitioner bought with the borrowed money. When the value of the seat increased substantially petitioner acknowledged in writing his indebtedness to the brother in an amount equal to one half the increase in the value of the seat.
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Petitioner borrowed money from his father's estate with the consent of his brother, who imposed a condition that he share in any profit from the ownership of the stock exchange seat which petitioner bought with the borrowed money. When the value of the seat increased substantially petitioner acknowledged in writing his indebtedness to the brother in an amount equal to one half the increase in the value of the seat. Petitioner thereafter paid interest on the indebtedness to his brother and curtailed the principal. Held, the interest so paid is deductible.
1Opinion of the Court
*120OPINION.
Akundell :
As we understand respondent’s position in this matter, it is that petitioner and his brother had a joint interest in whatever profit was to he realized on the sale of petitioner’s seat on the New York Stock Exchange, and that until the seat was actually sold at a profit Carl had no claim on petitioner and there was no indebtedness due him by petitioner. Respondent cites as authority for his position various cases which hold that interest on a promise to make a gift is not deductible. Simon Benson, 9 B.T.A. 279; Gilman v. Commissioner, 53 Fed. (2d) 47. This does not appear to…
2Cases cited1 opinion
- Benson v. CommissionerUnited States Board of Tax Appeals · 1927
3Cited by2 opinions
- Woodward v. United StatesDistrict Court, N.D. Iowa · 1952
- Couchman v. CommissionerUnited States Board of Tax Appeals · 1934