Eli Wallach and Anne (Jackson) Wallach v. The United States

FRIEDMAN, Circuit Judge.

The question for decision in this appeal from the judgment of the United States Claims Court dismissing an income tax refund suit is whether in determining the additional minimum income tax on “tax preference” items imposed by sections 56 and 55 of the Internal Revenue Code, interest the taxpayers paid on borrowings to finance the purchase of debt securities is directly deductible from the interest they received from the securities in computing their adjusted gross income (as the taxpayers contend), or instead (as the Internal Revenue Service and the Claims Court held)…