New York, Chicago & St. Louis R.R. v. Commissioner
United States Board of Tax Appeals
1. A railroad having defaulted in payment of interest on its outstanding bonds, its property was decreed to be sold as an entirety to discharge the bonds, and compliance with the decree was effected through a reorganization. The property was sold to a committee representing bondholders, creditors, and stockholders, and the committee conveyed it to several corporations organized to operate the property for a fixed price payable in stock and notes.
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1. A railroad having defaulted in payment of interest on its outstanding bonds, its property was decreed to be sold as an entirety to discharge the bonds, and compliance with the decree was effected through a reorganization. The property was sold to a committee representing bondholders, creditors, and stockholders, and the committee conveyed it to several corporations organized to operate the property for a fixed price payable in stock and notes. The latter corporations were in turn consolidated and their stock, which was held by the committee, was exchanged par for par for the stock of the…
1Opinion of the Court
*194OPINION.
Sternhagen :
1. The petitioner claims a deduction of $35,045.38 in 1917 as discount accrued in that year upon its first njortgage 4 per cent fifty-year bonds issued in 1887. The only question raised is whether there actually -was any discount involved in the issuance of petitioner’s bonds; for respondent concedes that if there was discount in 1887, when the bonds were issued, its amortization may be recognized and an aliquot part thereof, admittedly $35,045.38, deducted. Chicago, Rock Island & Pacific Railway Co., 13 B. T. A. 988; Kansas City Southern Railway Co., 16 B. T. A. 665;…
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