Schoellkopf v. Commissioner
United States Board of Tax Appeals
A private corporation, doing business in the State of Texas, and owning a varied assortment of obligations of subdivisions of the States of Texas and New Mexico, created a trust and transferred the municipal obligations to it, the corporation thereupon issuing trust certificates secured by the obligations in trust, the interest upon the trust certificates, except in certain instances, being payable by the trustee out of interest collected on the obligations.
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A private corporation, doing business in the State of Texas, and owning a varied assortment of obligations of subdivisions of the States of Texas and New Mexico, created a trust and transferred the municipal obligations to it, the corporation thereupon issuing trust certificates secured by the obligations in trust, the interest upon the trust certificates, except in certain instances, being payable by the trustee out of interest collected on the obligations. Held, the interest paid to the holders of the trust certificates is to be included in gross income, and is not free from tax as interest…
1Opinion of the Court
*96OPINION.
Van Fossan:
The petitioners’ position is that the interest paid to them was interest upon the direct obligations of political subdivisions of the States of Texas and New Mexico and as such was exempt from Federal income tax on constitutional grounds and under the express terms of section 22 (b) (4) of the Revenue Act of 1928.1 They state, on brief, “ if these petitioners are taxable on the amounts in controversy it is because under the particular facts of the cases the amounts in issue do not constitute interest upon such obligations.”
The respondent contends that the interest so paid…
2Cases cited1 opinion
- Willcutts v. BunnSupreme Court of the United States · 1931
3Cited by1 opinion
- Schoellkopf v. CommissionerUnited States Board of Tax Appeals · 1935