Texas Farm Bureau v. United States

Appellee seeks rehearing on the basis that the Court’s holding in this case, that the “debt versus contribution to capital” issue presents primarily a question of law, conflicts with existing Fifth Circuit authority. While we do not agree with this contention, we pause briefly to fit the holding in this case more securely into the Circuit’s jurisprudence.

Between the time this case was argued and the time that the panel decided it, Saunders v. Commissioner of Internal Revenue, 720 F.2d 871 (5th Cir.1983) was decided. Saunders involved funds distributed by an educational trust established by an…