Husky Oil Co. v. Commissioner
United States Tax Court
In 1972, P issued debentures which were convertible into shares of common stock of its foreign parent. In 1977, P called the debentures for redemption, thereby prompting most debenture holders to convert their debentures into the parent's common stock. The converted debentures were then redeemed from the parent by the issuance of interest-bearing promissory notes.
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In 1972, P issued debentures which were convertible into shares of common stock of its foreign parent. In 1977, P called the debentures for redemption, thereby prompting most debenture holders to convert their debentures into the parent's common stock. The converted debentures were then redeemed from the parent by the issuance of interest-bearing promissory notes. Held, the interest and premium paid by P to its parent upon the converted debentures are not deductible by P. Held, further, the unamortized issue costs of the debentures and costs of redemption must be amortized over the lives of…
1Opinion of the Court
Cohen, Judge:
Respondent determined deficiencies in petitioner’s income taxes for 1975, 1976, and 1977 in the following amounts:
Year Amount
1975 . $9,739
1976 . 142,570
1977. 1,965,191
The first group of questions presented for determination arise out of petitioner’s retirement of a bond issue in 1977. These questions are:(1) Whether interest1 of $753,280 paid by petitioner in 1977 to its parent on petitioner’s debentures is deductible by petitioner;(2) Whether the redemption premium of $1,082,999 paid by petitioner in 1977 to its parent is deductible by petitioner;(3) Whether petitioner is…
2Cases cited22 opinions
- Deputy, Administratrix v. Du PontSupreme Court of the United States · 1940
- Burnet v. HarmelSupreme Court of the United States · 1932
- Old Colony Railroad v. CommissionerSupreme Court of the United States · 1932
- Palmer v. BenderSupreme Court of the United States · 1932
- Lynch v. Alworth-Stephens Co.Supreme Court of the United States · 1925
17 more not listed; retrieve them via the Exa API.
3Cited by8 opinions
- Gulf Oil Corp. v. CommissionerUnited States Tax Court · 1986
- Kardolrac Industries, Corp. v. Wang Laboratories, Inc.Appellate Court of Illinois · 1985
- Marathon Oil Company, Survivor by Merger of Husky Oil Company, Cross-Appellee v. Commissioner of Internal Revenue, Cross-AppellantCourt of Appeals for the Tenth Circuit · 1987
- Reynolds Metals Co. v. CommissionerUnited States Tax Court · 1995
- Gulf Oil Corp. v. CommissionerUnited States Tax Court · 1986
3 more not listed; retrieve them via the Exa API.