Swoby Corp. v. Commissioner
United States Tax Court
1. 99-year 8 per cent "income debenture" of $ 250,000, issued with petitioner's stock of $ 200 total par value in exchange for property of sole stockholder upon petitioner's incorporation, held to represent invested rather than borrowed capital, requiring disallowance of deductions for "interest." 2. Payment by petitioner's lessee in return for petitioner's permission to cancel sublease, held not to entitle petitioner to relief under Internal Revenue Code, section 721 (a)…
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1. 99-year 8 per cent "income debenture" of $ 250,000, issued with petitioner's stock of $ 200 total par value in exchange for property of sole stockholder upon petitioner's incorporation, held to represent invested rather than borrowed capital, requiring disallowance of deductions for "interest." 2. Payment by petitioner's lessee in return for petitioner's permission to cancel sublease, held not to entitle petitioner to relief under Internal Revenue Code, section 721 (a) (2) (E), in absence of showing that transaction was abnormal.
1Opinion of the Court
Swoby Corporation, Petitioner, v. Commissioner of Internal Revenue, Respondent
Swoby Corp. v. Commissioner
Docket No. 10284
United States Tax Court
9 T.C. 887; 1947 U.S. Tax Ct. LEXIS 42;
October 31, 1947, Promulgated
Decision will be entered under Rule 50.
1. 99-year 8 per cent "income debenture" of $ 250,000, issued with petitioner's stock of $ 200 total par value in exchange for property of sole stockholder upon petitioner's incorporation, held to represent invested rather than borrowed capital, requiring disallowance of deductions for "interest."
2. Payment by petitioner's lessee in return for…
2Cases cited4 opinions
- John Kelley Co. v. CommissionerSupreme Court of the United States · 1946
- Mullin Bldg. Corp. v. CommissionerUnited States Tax Court · 1947
- Golden Belt Lumber Co. v. CommissionerUnited States Tax Court · 1943
- Swoby Corp. v. CommissionerUnited States Tax Court · 1947