America-Southeast Asia Co. v. Commissioner
United States Tax Court
In June and July 1949, petitioner corporation purchased burlap in India and borrowed pounds sterling from a bank to make payment. When it repaid the bank, the pound sterling had been devalued and petitioner realized a substantial gain. Held, the gain realized by petitioner is a gain arising directly out of its trade or business from the settlement of a debt incurred therein for less than its face amount and, hence, is taxable as ordinary income.
1Opinion of the Court
OPINION.
Rice, Judge:
This proceeding involves a deficiency in income tax for the year 1949 in the amount of $12,450.25.
The only issue is whether the gain realized by petitioner from the repayment of a debt owed in British pounds sterling, incurred in its trade or business, with devalued pounds sterling is taxable as ordinary income or as a short-term capital gain.
All of the facts were stipulated, are so found, and are incorporated herein by this reference.
Petitioner is a New York corporation with its principal place of business in the City of New York. It filed its corporate income tax return…
2Cases cited9 opinions
- Corn Products Refining Co. v. CommissionerSupreme Court of the United States · 1956
- United States v. Kirby Lumber CoSupreme Court of the United States · 1931
- Kaplan v. CommissionerUnited States Tax Court · 1953
- Reliable Incubator & Brooder Co. v. CommissionerUnited States Tax Court · 1946
- Willard Helburn, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the First Circuit · 1954
4 more not listed; retrieve them via the Exa API.
3Cited by27 opinions
- Levin v. CommissionerUnited States Tax Court · 1986
- American Air Filter Co. v. CommissionerUnited States Tax Court · 1983
- National-Standard Co. v. CommissionerUnited States Tax Court · 1983
- Hoover Co. v. CommissionerUnited States Tax Court · 1979
- Hollywood Baseball Ass'n v. CommissionerUnited States Tax Court · 1964
22 more not listed; retrieve them via the Exa API.