Halle v. United States

THOMSEN, Chief Judge.

This is an action for the recovery of income taxes and interest alleged to have been illegally assessed. Taxpayers claimed deductions for amortization of bond premiums and for interest expense, as well as for a charitable contribution, arising out of the transaction set forth in the statement of facts, below. The Commissioner allowed the charitable deduction, but disallowed the deductions for amortization and interest on the ground that they arose out of a sham transaction. The seller of the bonds had given taxpayers a “put” option, and the government contends that the…