Williams v. Commissioner
United States Tax Court
P and another person purchased a condominium in 1983 for $ 1,514,000. They paid $ 10,000 in cash and executed and delivered a fully recourse, non-interest-bearing note in the amount of $ 1,504,000. The $ 477,000 first installment on the note was due (and paid) in 1983 just over 6 months from the date of purchase, and the $ 1,027,000 second, and final, installment was due in 30 years.
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P and another person purchased a condominium in 1983 for $ 1,514,000. They paid $ 10,000 in cash and executed and delivered a fully recourse, non-interest-bearing note in the amount of $ 1,504,000. The $ 477,000 first installment on the note was due (and paid) in 1983 just over 6 months from the date of purchase, and the $ 1,027,000 second, and final, installment was due in 30 years. Because of the non-interest-bearing nature of the note, sec. 483 characterized $ 315,482 of the first installment as interest. Only $ 25,463 of interest had economically accrued on the note by the due date of the…
1Opinion of the Court
OPINION
CLAPP, Judge:
Respondent determined a $29,015 deficiency in petitioners’ Federal income tax and a $7,254 addition to tax under section 6661 for the year 1983. In his amended answer, respondent increased the deficiency to $61,011.50 and conceded that section 6661 is not applicable. All section references are to the Internal Revenue Code for the year in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure.
The issue is whether section 446(b) or section 461(g) limits petitioners’ interest deduction to the amount of interest that economically accrued rather…
2Cases cited26 opinions
- Crane v. CommissionerSupreme Court of the United States · 1947
- Thor Power Tool Co. v. CommissionerSupreme Court of the United States · 1979
- Commissioner v. HansenSupreme Court of the United States · 1959
- Hanover Bank v. CommissionerSupreme Court of the United States · 1962
- Bulova Watch Co. v. United StatesSupreme Court of the United States · 1961
21 more not listed; retrieve them via the Exa API.
3Cited by12 opinions
- Lloyd E. Williams, Jr. And Mildred A. Williams v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1993
- Weis v. CommissionerUnited States Tax Court · 1990
- Intel Corp. v. CommissionerUnited States Tax Court · 1993
- Estate of Ratliff v. CommissionerUnited States Tax Court · 1993
- Williams v. CommissionerUnited States Tax Court · 1992
7 more not listed; retrieve them via the Exa API.