M & E Corp. v. Commissioner
United States Tax Court
Income -- Final Unused Balance in a Reserve for Bad Debts. -- Part of a final unused balance in a reserve for bad debts which was built up by deductions which did not offset income is not taxable as income.
1Opinion of the Court
OPINION.
Murdock, Judge:
The petitioner acquired the mortgages by giving in exchange its certificates of indebtedness in an amount equal to the appraised value of the mortgages at the time of the exchange. We need not go back of that event. The cost of the mortgages to the petitioner was $82,377.78. It realized only $70,103.96 upon the liquidation of the mortgages. It charged the difference of $12,273.82 against a reserve for loss on the mortgages. It built up that reserve by additions of $15,417.62 all of which it claimed as deductions on its returns for the years 1936 through 1938. The…
2Cases cited1 opinion
- Dobson v. CommissionerSupreme Court of the United States · 1944
3Cited by15 opinions
- Commissioner of Internal Revenue v. First State BankCourt of Appeals for the Fifth Circuit · 1948
- Bird Management, Inc. v. CommissionerUnited States Tax Court · 1967
- J. E. Hawes Corp. v. CommissionerUnited States Tax Court · 1965
- Estate of Heinz Schmidt, Deceased, and Charlotte Schmidt v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1966
- Home Mutual Insurance Company, Cross v. Commissioner of Internal Revenue, CrossCourt of Appeals for the Seventh Circuit · 1980
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