Menz v. Commissioner
United States Tax Court
Petitioner-husband was a limited partner in RCA, a cash basis partnership engaged in constructing a shopping center during the years in question. RCA's financing was a line-of-credit with CPI, an accrual basis real estate investment trust. X corporation was a general partner in RCA, possessing "approval power" over all major transactions of RCA. X was wholly owned by and the nominee of CPI.
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Petitioner-husband was a limited partner in RCA, a cash basis partnership engaged in constructing a shopping center during the years in question. RCA's financing was a line-of-credit with CPI, an accrual basis real estate investment trust. X corporation was a general partner in RCA, possessing "approval power" over all major transactions of RCA. X was wholly owned by and the nominee of CPI. X was not a managing partner in RCA and was not a signatory on that partnership's bank accounts. RCA was forbidden under its financing agreements to borrow from sources other than CPI without CPI's…
1Opinion of the Court
Dawson, Judge:
Respondent determined the following deficiencies in petitioners’ Federal income taxes:
Year Deficiency
1971 . $17,370
1974 . 10,019
1976 . 6,412
The deficiencies result from respondent’s disallowance of petitioner Norman Menz’s allocable share of partnership losses in the years 1974 and 1975. The sole issue for decision is whether that partnership "paid” interest within the meaning of section 163(a)1 through a series of wire-funds exchanges between separate bank accounts of the partnership and its lender.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found. The…
2Cases cited27 opinions
- Eli D. Goodstein v. Commissioner of Internal Revenue, Commissioner of Internal Revenue v. Eli D. GoodsteinCourt of Appeals for the First Circuit · 1959
- Helvering v. PriceSupreme Court of the United States · 1940
- Nat Harrison Assoc., Inc. v. CommissionerUnited States Tax Court · 1964
- G. Douglas Burck and Marjorie W. Burck v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1976
- Crown v. CommissionerUnited States Tax Court · 1981
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