Metropolitan Mortg. Fund, Inc. v. Commissioner
United States Tax Court
Petitioner, on the accrual basis, originates conventional, VA, and FHA loans for purchasers of single-family dwellings. It charges "points" to the sellers of such dwellings and charges the purchaser 1 percent which is an offset against amounts petitioner pays at the "closing" for the note and mortgage.
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Petitioner, on the accrual basis, originates conventional, VA, and FHA loans for purchasers of single-family dwellings. It charges "points" to the sellers of such dwellings and charges the purchaser 1 percent which is an offset against amounts petitioner pays at the "closing" for the note and mortgage. Held, the 1-percent charge does not constitute a "point" or interest, but instead represents a loan origination fee in the nature of compensation for services rendered and is taxable as income to petitioner at the time the loan is consummated.
1Opinion of the Court
Goefe, Judge:
The Commissioner determined the following deficiencies in Federal income tax of petitioners:
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The Fitton Co. is a petitioner by reason of being the parent of Metropolitan Mortgage Fund during the taxable year ended November 30, 1967, for which a consolidated Federal income tax return was filed. The sole issue to be decided results only from adjustments to the income of Metropolitan Mortgage Fund; therefore, it will hereinafter be referred to as petitioner.
The issue presented for decision is the taxability of a 1-percent charge petitioner makes to purchasers of…
2Cases cited5 opinions
- United States v. DavisSupreme Court of the United States · 1962
- Columbia State Sav. Bank v. CommissionerUnited States Board of Tax Appeals · 1929
- Bonded Mortgage Co. v. Commissioner of Int. Rev.Court of Appeals for the Fourth Circuit · 1934
- Columbia State Sav. Bank v. Commissioner of Int. Rev.Court of Appeals for the Seventh Circuit · 1930
- North-Western Trust & Sav. Bank v. CommissionerUnited States Board of Tax Appeals · 1930
3Cited by9 opinions
- Chesapeake Financial Corp. v. CommissionerUnited States Tax Court · 1982
- Pacific First Federal Sav. & Loan Asso. v. CommissionerUnited States Tax Court · 1982
- Chesapeake Financial Corp. v. CommissionerUnited States Tax Court · 1982
- Dozier v. CommissionerUnited States Tax Court · 1982
- Metropolitan Mortg. Fund, Inc. v. CommissionerUnited States Tax Court · 1974
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