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
Metropolitan Mortgage Fund, Inc., Petitioner v. Commissioner of Internal Revenue, Respondent; The Fitton Company, Petitioner v. Commissioner of Internal Revenue, Respondent
Metropolitan Mortg. Fund, Inc. v. Commissioner
Docket Nos. 299-70, 300-70
United States Tax Court
62 T.C. 110; 1974 U.S. Tax Ct. LEXIS 118;
April 30, 1974, Filed
Decisions will be entered for the respondent.
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…
2Cases cited6 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
- Metropolitan Mortg. Fund, Inc. v. CommissionerUnited States Tax Court · 1974
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