B. F. Goodrich Co. v. Commissioner
United States Tax Court
1. Deduction from Income -- Accrual -- Interest. -- The petitioner, in December 1936, called its bonds for payment on February 1, 1937, and deposited sufficient funds with the trustee to pay off the principal, a premium, and interest to the call date. The bondholders were permitted to surrender their bonds in advance of the call date and receive payment in full.
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1. Deduction from Income -- Accrual -- Interest. -- The petitioner, in December 1936, called its bonds for payment on February 1, 1937, and deposited sufficient funds with the trustee to pay off the principal, a premium, and interest to the call date. The bondholders were permitted to surrender their bonds in advance of the call date and receive payment in full. Held, that the amount accrued and paid on bonds actually surrendered and canceled in 1936, representing interest to February 1, 1937, was deductible in 1936. But where the bonds were not surrendered and canceled and payment was not…
1Opinion of the Court
OPINION.
Murdock, Judge:
The Commissioner determined a deficiency of $27,310.89 in income tax for the calendar year 1936. One of the adjustments made by him in determining the deficiency was the dis-allowance of a deduction of $88,977.16 which he held was interest on bonds accruing in January 1937 and, therefore, not a proper deduction for 1936. The petitioner assigns that action as error. Another adjustment which the Commissioner made in determining the deficiency was the exclusion from income as nontaxable of an amount of $136,970.23 described as “French bank loan transaction.” The…
2Cases cited1 opinion
- Bowers v. Kerbaugh-Empire Co.Supreme Court of the United States · 1926
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- Lay v. CommissionerUnited States Tax Court · 1977
- Foundation Co. v. CommissionerUnited States Tax Court · 1950
- Willard Helburn, Inc. v. CommissionerUnited States Tax Court · 1953
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