Bangor & A. R. Co. v. Commissioner
United States Tax Court
Petitioner, in 1942, repurchased its bonds in the open market. It paid less for the repurchased bonds than their face value, realizing a profit in the amount of the difference. Pursuant to the option provided under sections 22 (b) (9) and 113 (b) (3) of the Internal Revenue Code, that bond profit was excluded from petitioner's 1942 income for income tax purposes, and instead was applied in reduction of the basis of property of petitioner.
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Petitioner, in 1942, repurchased its bonds in the open market. It paid less for the repurchased bonds than their face value, realizing a profit in the amount of the difference. Pursuant to the option provided under sections 22 (b) (9) and 113 (b) (3) of the Internal Revenue Code, that bond profit was excluded from petitioner's 1942 income for income tax purposes, and instead was applied in reduction of the basis of property of petitioner. In computing its excess profits tax liability for 1943, petitioner determined its excess profits credit on the invested capital method. Under section 718…
1Opinion of the Court
OPINION.
Raum, Judge:
In 1942 petitioner repurchased its own bonds, paying $497,553.30 for bonds of the face amount of $634,000, and realized a taxable gain of $136,446.70. United States v. Kirby Lumber Co., 284 U. S. 1; Commissioner v. Jacobson, 336 U. S. 28; Spear Box Co. v. Commissioner, 182 Fed. (2d) 844 (C. A. 2). It elected, however, to take advantage of a statutory option under which the gain was excluded from its 1942 gross income, and, instead, the gain was applied in reduction of the basis of property held by petitioner. Sections 22 (b) (9) and 113 (b) (3), Internal Revenue Code.1
There…
2Cases cited7 opinions
- Commissioner v. South Texas Lumber Co.Supreme Court of the United States · 1948
- United States v. Kirby Lumber CoSupreme Court of the United States · 1931
- Commissioner v. JacobsonSupreme Court of the United States · 1949
- Commissioner v. Estate of HolmesSupreme Court of the United States · 1946
- Commissioner v. WheelerSupreme Court of the United States · 1945
2 more not listed; retrieve them via the Exa API.
3Cited by25 opinions
- Meyer v. CommissionerUnited States Tax Court · 1966
- Lucile H. Meyer v. Commissioner of Internal Revenue, Commissioner of Internal Revenue v. Leon R. MeyerCourt of Appeals for the Eighth Circuit · 1967
- Anderson v. CommissionerUnited States Tax Court · 1976
- Capital Nat'l Bank v. CommissionerUnited States Tax Court · 1951
- Henry C. Beck Co. v. CommissionerUnited States Tax Court · 1969
20 more not listed; retrieve them via the Exa API.