Piermont Corp. v. Commissioner
United States Board of Tax Appeals
1. Petitioner refinanced its demand bank loan, contracted prior to January 1, 1934, by issuing debentures in 1934 to its stockholders and using the proceeds of the debentures to pay off the bank. During the taxable year, by appropriate resolutions, property worth $50,000 was set aside to retire the debentures.
Read the full summary
1. Petitioner refinanced its demand bank loan, contracted prior to January 1, 1934, by issuing debentures in 1934 to its stockholders and using the proceeds of the debentures to pay off the bank. During the taxable year, by appropriate resolutions, property worth $50,000 was set aside to retire the debentures. Held, petitioner is entitled to deduct the aforesaid sum as an amount used or set aside to retire indebtedness incurred prior to January, 1, 1934, under section 351(b)(2)(B) of the Revenue Act of 1934. Sun Pipe Line Co.,42 B.T.A. 1413, followed. 2. So long as an amount is set aside to…
1Opinion of the Court
*772OPINION.
Leech :
Respondent has disallowed the deduction from petitioner’s adjusted net income of $50,000 set aside during 1935 for the retirement of its debentures.
The issue, as submitted at the hearing and to a discussion of which the original briefs were limited, was merely whether the bond indebtedness for the retirement of which the contested $50,000 in securities was set aside, was “indebtedness incurred prior to January 1, 1934,” within the meaning of section 351 (b) (2) (B) of the Revenue Act of 1934. That issue, as thus submitted, was decided adversely to respondent in Sun Pife Line…
2Cited by2 opinions
- Cedarburg Canning Co. v. Commissioner of Int. Rev.Court of Appeals for the Seventh Circuit · 1945
- Piermont Corp. v. CommissionerUnited States Board of Tax Appeals · 1941