Jacobson v. Commissioner
United States Tax Court
Held, taxpayers who made bank loans on the security of common stock and deposited the proceeds in their separate bank accounts and on the same day or in some instances a few days later purchased tax-exempt securities in amounts that were for the most part the same as the amount of the indebtedness incurred, had incurred indebtedness to purchase or carry tax-exempt obligations within the provisions of section 23 (b), I. R. C. 1939, and the interest on such indebtedness was…
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Held, taxpayers who made bank loans on the security of common stock and deposited the proceeds in their separate bank accounts and on the same day or in some instances a few days later purchased tax-exempt securities in amounts that were for the most part the same as the amount of the indebtedness incurred, had incurred indebtedness to purchase or carry tax-exempt obligations within the provisions of section 23 (b), I. R. C. 1939, and the interest on such indebtedness was not deductible. Held, further, there is no merit in taxpayers' contention that only a portion of the indebtedness was used…
1Opinion of the Court
Mulroney, Judge:
Respondent determined a deficiency in petitioners’ income tax for the year 1952 in the amount of $18,097.85. Certain adjustments made by the respondent are not contested by the petitioners. Respondent disallowed a deduction of $25,777.75, claimed by the petitioners for interest paid on certain bank loans, on the ground that such indebtedness was incurred to purchase tax-exempt obligations within the meaning of section 23 (b) of the 1939 Internal Revenue Code.1 The correctness of this disallowance is the sole issue in this case.
FINDINGS OF FACT.
Petitioners, Bernard H. and…
Also in this document: Concurrence.
2Cases cited1 opinion
- Denman v. SlaytonSupreme Court of the United States · 1931
3Cited by18 opinions
- Constance M. Bishop v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1965
- Leslie v. CommissionerUnited States Tax Court · 1968
- Indian Trail Trading Post, Inc. v. CommissionerUnited States Tax Court · 1973
- Ball v. CommissionerUnited States Tax Court · 1970
- Bishop v. CommissionerUnited States Tax Court · 1963
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