Lovejoy v. Commissioner
United States Board of Tax Appeals
1. In deciding whether an item is a deduction in determining taxable net income, the taxpayer's method of accounting is not controlling unless it clearly reflects income, notwithstanding the categorical statement that the taxpayer's accounts were kept and the return made on the "cash basis." 2. Commissions, fees, and printing costs paid in one year by a taxpayer in securing a loan for ten or fifteen years covered by a mortgage on property to be leased, are not deductible in…
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1. In deciding whether an item is a deduction in determining taxable net income, the taxpayer's method of accounting is not controlling unless it clearly reflects income, notwithstanding the categorical statement that the taxpayer's accounts were kept and the return made on the "cash basis." 2. Commissions, fees, and printing costs paid in one year by a taxpayer in securing a loan for ten or fifteen years covered by a mortgage on property to be leased, are not deductible in full in the year of payment. Olinger Corporation,9 B.T.A. 170, overruled.
1Opinion of the Court
*1180OPINION.
Steiinhagen :
In filing her return the petitioner took as a deduction $9,779.58, the aggregate of the four items paid in 1924 in connection with the mortgage loan of $175,000. The respondent, after audit, made several adjustments, among which was the disallowance of this deduction. It is not entirely clear but what respondent substituted a deduction of part of this amount upon some basis of apportionment; but whatever the method of computation, the essence of the adjustment is that the amounts paid were called capital expenditures and hence the deduction was disallowed in their…
2Cases cited2 opinions
- United States v. AndersonSupreme Court of the United States · 1926
- American National Co. v. United StatesSupreme Court of the United States · 1927
3Cited by57 opinions
- Enoch v. CommissionerUnited States Tax Court · 1972
- Sandor v. CommissionerUnited States Tax Court · 1974
- Goodwin v. CommissionerUnited States Tax Court · 1980
- Van Raden v. CommissionerUnited States Tax Court · 1979
- Rubnitz v. CommissionerUnited States Tax Court · 1977
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