Fifth Avenue-14th Street Corp. v. Commissioner
United States Tax Court
Petitioner purchased, for less than face value, and turned in at face value, as payment of its mortgage indebtedness, certain mortgage certificates issued by the trustee under the mortgage. The petitioner was not insolvent. Though under the agreement between petitioner and the trustee the certificates could be used at face value to discharge principal indebtedness, the record does not show the value of the property at time of acquisition, nor its cost to petitioner.
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Petitioner purchased, for less than face value, and turned in at face value, as payment of its mortgage indebtedness, certain mortgage certificates issued by the trustee under the mortgage. The petitioner was not insolvent. Though under the agreement between petitioner and the trustee the certificates could be used at face value to discharge principal indebtedness, the record does not show the value of the property at time of acquisition, nor its cost to petitioner. Held, that the petitioner realized income to the extent of the difference between cost and face value of the certificates.…
1Opinion of the Court
OPINION.
Disney, Judge:
The issue here presented is whether or not the petitioner realized income through reductions of its mortgage indebtedness, the petitioner having purchased mortgage certificates at less than face value and the mortgagee having accepted them at face value in reduction of the debt. The respondent’s position is that, under the rule of United States v. Kirby Lumber Co., 284 U. S. 1, the amounts by which face value exceeded petitioner’s-cost constitute income taxable to the petitioner. The petitioner makes the following contentions : first, that the principle of the Kirby…
2Cases cited6 opinions
- United States v. Kirby Lumber CoSupreme Court of the United States · 1931
- Helvering v. American Dental Co.Supreme Court of the United States · 1943
- Helvering v. American Chicle Co.Supreme Court of the United States · 1934
- Ernst Kern Co. v. CommissionerUnited States Tax Court · 1942
- Shellabarger Grain Products Co. v. CommissionerUnited States Tax Court · 1943
1 more not listed; retrieve them via the Exa API.
3Cited by12 opinions
- Merkel v. CommissionerUnited States Tax Court · 1997
- Jacobson v. CommissionerUnited States Tax Court · 1946
- Kramon Development Co. v. CommissionerUnited States Tax Court · 1944
- Babin v. CommissionerUnited States Tax Court · 1992
- Bulkley Bldg. Co. v. CommissionerUnited States Tax Court · 1944
7 more not listed; retrieve them via the Exa API.