Player Realty Co. v. Commissioner
United States Tax Court
Petitioner, incident to its business of constructing and selling houses, borrowed money and secured the loans by executing mortgages upon the various properties upon which houses were built. The purchasers of these houses assumed as part of the purchase price the unpaid balances due thereon.
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Petitioner, incident to its business of constructing and selling houses, borrowed money and secured the loans by executing mortgages upon the various properties upon which houses were built. The purchasers of these houses assumed as part of the purchase price the unpaid balances due thereon. Held, petitioner is not entitled to include the amounts due on these loans and assumed by others in computing its borrowed invested capital under section 719 (a) (1) of the Internal Revenue Code.
1Opinion of the Court
OPINION.
Kern, Judge:
The Commissioner determined a deficiency in the amount of $4,355.25 in petitioner’s excess profits tax for the taxable year ended December 31, 1942. All of the facts were stipulated and we find them to be as stipulated.
The single question presented is whether respondent erred in computing petitioner’s excess profits credit under the invested capital method by excluding from petitioner’s borrowed invested capital the amounts of mortgages on real property, executed by petitioner but assumed by purchasers of the mortgaged real property.
Petitioner is a corporation, organized…
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