Reliable Incubator & Brooder Co. v. Commissioner
United States Tax Court
1. Petitioner, a corporation, owed $ 26,830.76 to the widow of a deceased creditor of petitioner. In consideration of her promise to cancel the indebtedness and to release petitioner from all her claims for moneys due, petitioner undertook to pay her thirty dollars per week for remainder of her life.
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1. Petitioner, a corporation, owed $ 26,830.76 to the widow of a deceased creditor of petitioner. In consideration of her promise to cancel the indebtedness and to release petitioner from all her claims for moneys due, petitioner undertook to pay her thirty dollars per week for remainder of her life. Held, no part of the weekly payments is deductible by petitioner as "interest" under section 23 (b), Internal Revenue Code. 2. On August 1, 1940, petitioner was obligated to pay M $ 50 per month on a total indebtedness of $ 6,700. At M's request petitioner paid M $ 600 in August 1940, in…
1Opinion of the Court
OPINION.
Kern, Judge-.
Five separate questions are presented here for decision. We shall consider each of them separately.
The first question is whether petitioner is entitled to deductions for each of the three fiscal years ended June 30, 1941, 1942, and 1943, respectively, for the payments made to Mrs. Myers, to the extent that such payments included interest, as computed on an actuarial basis.
Petitioner concedes that the entire amounts paid to Mrs. Myers in these taxable years are not deductible as interest, but contends that it is entitled to deduct as interest such portions of these…
2Cases cited3 opinions
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- Bank of Newberry v. CommissionerUnited States Tax Court · 1942
3Cited by34 opinions
- John C. W. Dix and Caroline W. Dix v. Commissioner of Internal Revenue, George E. Dix v. Commissioner of Internal RevenueCourt of Appeals for the Fourth Circuit · 1968
- America-Southeast Asia Co. v. CommissionerUnited States Tax Court · 1956
- Dix v. CommissionerUnited States Tax Court · 1966
- Colonial Sav. Asso. v. CommissionerUnited States Tax Court · 1985
- Garvey, Inc. v. United StatesUnited States Court of Claims · 1983
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