Foresun, Inc. v. Commissioner
United States Tax Court
Held: Transactions between petitioner and certain individuals resulted in contributions to petitioner's capital, rather than a sale and loans, so that respondent properly disallowed interest deductions. Petitioner's basis in the contributed property is that of its transferor, section 113(a)(8)(B), I.R.C. 1939, not the "sale" price.
1Opinion of the Court
OPINION
Issue 1
The issue is whether petitioner is entitled to deduct the annual payments of $12,000 made to Ada as interest. The answer to this question depends upon whether the transaction whereby Ada transferred the property to petitioner was a sale as contended by petitioner or was a contribution to capital as contended by respondent.
There is no question here with respect to the fonr of the instruments involved. Respondent recognizes that the conveyance by Ada to petitioner was in the form of a sale of the property to petitioner and that the note and mortgage given by petitioner to Ada were…
2Cases cited17 opinions
- John Kelley Co. v. CommissionerSupreme Court of the United States · 1946
- Gooding Amusement Co. v. CommissionerUnited States Tax Court · 1954
- Edwards v. Cuba RailroadSupreme Court of the United States · 1925
- Brown Shoe Co. v. CommissionerSupreme Court of the United States · 1950
- Sun Properties, Inc. v. United StatesCourt of Appeals for the Fifth Circuit · 1955
12 more not listed; retrieve them via the Exa API.
3Cited by26 opinions
- Litton Business Systems, Inc. v. CommissionerUnited States Tax Court · 1973
- Plantation Patterns, Incorporated v. Commissioner of Internal Revenue, John S. Jemison, Jr. And Marie S. Jemison v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1972
- Burr Oaks Corp. v. CommissionerUnited States Tax Court · 1965
- Foresun, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1965
- Sherwood Memorial Gardens, Inc. v. CommissionerUnited States Tax Court · 1964
21 more not listed; retrieve them via the Exa API.