Universal Casting Corp. v. Commissioner
United States Tax Court
Petitioner, a corporation, issued notes to its shareholders to replace notes already held by them. The new notes were for a term of 20 years and carried interest at 5 percent to be paid out of income subject to certain conditions contained in the face of the new notes. In 1953, 1954, and 1955 petitioner paid interest on the notes and deducted it in each year. Commissioner disallowed the deduction. Held: No debt existed.
Read the full summary
Petitioner, a corporation, issued notes to its shareholders to replace notes already held by them. The new notes were for a term of 20 years and carried interest at 5 percent to be paid out of income subject to certain conditions contained in the face of the new notes. In 1953, 1954, and 1955 petitioner paid interest on the notes and deducted it in each year. Commissioner disallowed the deduction. Held: No debt existed. The corporation is not entitled to an interest deduction.
1Opinion of the Court
MulRONev, Judge:
The respondent determined deficiencies in petitioner’s income tax of $8,260 in 1953, $6,136 in 1954, and $6,136 in 1955. Petitioner deducted as interest payments to holders of its 5-percent income notes in each of the years in question. Respondent disallowed the deductions. The sole question for decision is the correctness of respondent’s disallowance.
FINDINGS OF FACT.
Some of the facts have been stipulated and they are found accordingly.
Petitioner, Universal Castings Corporation, is an Illinois corporation organized in 1934, engaged in the business of manufacturing castings.…
2Cases cited7 opinions
- John Kelley Co. v. CommissionerSupreme Court of the United States · 1946
- O. H. Kruse Grain & Milling v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1960
- Wilbur Sec. Co. v. CommissionerUnited States Tax Court · 1959
- Talbot Mills v. Commissioner of Internal RevenueCourt of Appeals for the First Circuit · 1944
- Commissioner of Internal Revenue v. John Kelley Co.Court of Appeals for the Seventh Circuit · 1944
2 more not listed; retrieve them via the Exa API.
3Cited by9 opinions
- Indmar Products Co., Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 2006
- Riss & Co. v. CommissionerUnited States Tax Court · 1964
- Monon Railroad v. CommissionerUnited States Tax Court · 1970
- Utility Trailer Manufacturing Company v. United StatesDistrict Court, S.D. California · 1962
- Indmar Products Co v. CIRCourt of Appeals for the Sixth Circuit · 2006
4 more not listed; retrieve them via the Exa API.