Salley v. Commissioner
United States Tax Court
Petitioners purchased two $ 20,000 life insurance policies calling for annual premiums in excess of $ 26,000 on each policy and containing provisions for a "guaranteed annual return" of $ 25,000, payable at the insured's option upon receipt of each annual premium.
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Petitioners purchased two $ 20,000 life insurance policies calling for annual premiums in excess of $ 26,000 on each policy and containing provisions for a "guaranteed annual return" of $ 25,000, payable at the insured's option upon receipt of each annual premium. Petitioners, after paying each premium, elected to leave the guaranteed annual return with the company to accumulate but promptly borrowed it, plus portions of the cash values attributable to the life insurance reserves; petitioners prepaid interest on these loans and deducted such interest in computing their income tax for 1964,…
1Opinion of the Court
FeatheRSton, Judge:
Respondent determined deficiencies in petitioners’ Federal income tax for 1964, 1965, and 1966 in the amounts of $6,264.77, $7,368.09, and $8,883.11, respectively. The only issue presented for decision is whether certain payments made by petitioners to Houston National Life Insurance Co. during the years in issue are deductible as interest under section 163(a),1 business expenses under section 162(a), or expenses paid for the production of income under section 212(1).
FINDINGS OF FACT
Rufus C. Salley (hereinafter referred to as petitioner) and Beulah S. Salley (hereinafter…
2Cases cited19 opinions
- Deputy, Administratrix v. Du PontSupreme Court of the United States · 1940
- Knetsch v. United StatesSupreme Court of the United States · 1960
- Old Colony Railroad v. CommissionerSupreme Court of the United States · 1932
- Carl E. Weller and Emily I. Weller v. Commissioner of Internal Revenue, W. Stuart Emmons v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 1959
- Autenreith v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 1940
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3Cited by15 opinions
- Titcher v. CommissionerUnited States Tax Court · 1971
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- Rufus C. Salley and Beulah S. Salley v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1972
- Coors v. United StatesUnited States Court of Claims · 1978
- Cameron v. CommissionerUnited States Tax Court · 1983
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