Conestoga Transportation Co. v. Commissioner

OPINION.

Arundell, Judge:

The major issue is whether the petitioner realized income upon the purchase of its obligations at less than face value, minus unamortized discount, during the years 1940, 1941, and 1943. The years 1940 and-1941 are before us only in connection with the determination of net losses as they affect the years 1942 and 1943.

Since the Supreme Court decision in United States v. Kirby Lumber Co., 284 U. S. 1, it is now well settled that a solvent corporation realizes income upon the discharge of its indebtedness at less than face value since “it [the transaction] made available…