Bishop v. Commissioner
United States Tax Court
Petitioner borrowed from a bank $ 159,000 and purchased stocks and debentures, the dividends and interest on which were subject to income tax. Later she borrowed from another bank $ 159,000 with which she repaid the original loan.
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Petitioner borrowed from a bank $ 159,000 and purchased stocks and debentures, the dividends and interest on which were subject to income tax. Later she borrowed from another bank $ 159,000 with which she repaid the original loan. Subsequent to repaying the original loan, petitioner sold the securities which she had purchased with the money received from the original loan, did not repay the loan, and shortly after the sale purchased obligations the interest on which is wholly exempt from income tax in approximately the amount of the sales price received. Later in the same year she sold these…
1Opinion of the Court
OPINION
Section 265(2) of the Internal Revenue Code of 19542 provides that no deduction shall be allowed for interest on indebtedness incurred or continued to purchase or carry obligations the interest on which is wholly exempt from Federal income tax. The deductions at issue in this case are interest payments on a $159,000 loan to petitioner from the Cleveland Trust Co. Petitioner borrowed this amount from the Cleveland Trust Co. on June 6,1955, for the purpose of repaying a loan in an identical amount which she then had outstanding at another bank and actually did use the proceeds of the…
2Cases cited5 opinions
- Denman v. SlaytonSupreme Court of the United States · 1931
- Jacobson v. CommissionerUnited States Tax Court · 1957
- R. B. George Machinery Co. v. CommissionerUnited States Board of Tax Appeals · 1932
- First Nat. Bank of Chicago v. United StatesSupreme Court of the United States · 1931
- Mulhens A. Kropff, Inc. v. Ferd Muelhens, Inc.District Court, S.D. New York · 1929
3Cited by21 opinions
- Illinois Terminal Railroad Company v. The United StatesUnited States Court of Claims · 1967
- Constance M. Bishop v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1965
- Leslie v. CommissionerUnited States Tax Court · 1968
- Indian Trail Trading Post, Inc. v. CommissionerUnited States Tax Court · 1973
- Ellis I. And Nelle S. Levitt, Appellants-Appellees v. United States of America, Appellees-AppellantsCourt of Appeals for the Eighth Circuit · 1975
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