Estate of Ratliff v. Commissioner
United States Tax Court
P extended interest-bearing loans repayable in monthly installments over 15 years. The notes evidencing the loans provided that all installments were to be applied to principal until principal was fully paid and thereafter to interest. Held, the provisions of the notes do not, as a matter of law, control the allocation of the payments for income tax purposes.
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P extended interest-bearing loans repayable in monthly installments over 15 years. The notes evidencing the loans provided that all installments were to be applied to principal until principal was fully paid and thereafter to interest. Held, the provisions of the notes do not, as a matter of law, control the allocation of the payments for income tax purposes. Held, further, P's motion for summary judgment raises factual questions as to whether the notes reflected bona fide, arm's-length arrangements and the extent to which sec. 446, I.R.C., applies and, accordingly, is denied.
1Opinion of the Court
OPINION
Tannenwald, Judge:
This case is before us on petitioner’s motion for summary judgment. The issue is whether respondent is entitled, under section 446,1 to allocate certain payments, designated to be applied to principal by agreement between the debtor and petitioner’s decedent as creditor, to interest income during each of the taxable years of the decedent ending December 31, 1986, through December 31, 1988. If we hold that respondent is not so entitled, petitioner will prevail on that issue and on the additions to tax under sections 6653(a) and 6661 insofar as they are related to that…
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- Baird v. CommissionerUnited States Tax Court · 1977
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