Nichols v. Commissioner of Internal Revenue

McALLISTER, Circuit Judge.

Petitioners, husband and wife, hereinafter referred to as petitioner, appeal from a decision of the Tax Court, that they realized income on foreclosure of a mortgage. In its holding, the Tax Court sustained the claim of the Commissioner that the accrued interest, included in the bid on foreclosure, is the measure of the realized income to the mortgagee. On appeal, it is contended that, under Treasury Regulations, gain or loss, on foreclosure, is measured by the difference between the fair market value of the property foreclosed, and the cost to- the taxpayer, of his…