Mahoney Motor Co. v. Commissioner
United States Tax Court
Petitioner, a corporation engaged as an automobile dealer, borrowed substantial amounts from banks to purchase United States Government obligations, securing the borrowings with the obligations purchased. It realized a profit on the sale of the obligations and on the interest collected.
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Petitioner, a corporation engaged as an automobile dealer, borrowed substantial amounts from banks to purchase United States Government obligations, securing the borrowings with the obligations purchased. It realized a profit on the sale of the obligations and on the interest collected. Held, the amounts borrowed did not constitute borrowed invested capital for excess profits tax purposes under section 719, Internal Revenue Code, and Regulations 112, section 35.719-1. Hart-Bartlett-Sturtevant Grain Co., 12 T. C. 760, affd., 182 Fed. (2d) 153, followed. Globe Mortgage Co., 14 T. C. 192,…
1Opinion of the Court
OPINION.
Johnson, Judge:
Petitioner contends that sums borrowed by it to purchase United States Treasury obligations, which borrowings were evidenced by notes, the notes being secured by the obligations purchased, constitute borrowed invested capital under section 719,1 Internal Revenue Code, for the purpose of computing its excess profits tax credits for 1944 and 1945. It is petitioner’s position that the instant proceeding is ruled by Globe Mortgage Co., 14 T. C. 192.
Respondent contends that these sums do not constitute borrowed invested capital within the meaning of section 719. He relies…
2Cases cited3 opinions
- West Constr. Co. v. CommissionerUnited States Tax Court · 1946
- Player Realty Co. v. CommissionerUnited States Tax Court · 1947
- Emeloid Co. v. CommissionerUnited States Tax Court · 1950
3Cited by9 opinions
- McDonnell Aircraft Corp. v. CommissionerUnited States Tax Court · 1951
- Hunt Foods, Inc. v. CommissionerUnited States Tax Court · 1951
- Mahoney Motor Co. v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1951
- Pacific Affiliate, Inc. v. CommissionerUnited States Tax Court · 1952
- Hunt Foods, Inc. v. CommissionerUnited States Tax Court · 1951
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