12701 Shaker Boulevard Co. v. Commissioner
United States Tax Court
Petitioner in 1947 obtained a 20-year mortgage loan for $ 800,000. In 1949 the petitioner obtained a new 20-year mortgage loan in the amount of $ 975,000 from a new lender and petitioner was obliged to make a prepayment penalty in 1949 of $ 38,117 to the old lender for the privilege of prepaying the old mortgage loan.
Read the full summary
Petitioner in 1947 obtained a 20-year mortgage loan for $ 800,000. In 1949 the petitioner obtained a new 20-year mortgage loan in the amount of $ 975,000 from a new lender and petitioner was obliged to make a prepayment penalty in 1949 of $ 38,117 to the old lender for the privilege of prepaying the old mortgage loan. Held, the prepayment penalty is not amortizable over the life of the new mortgage loan but it was properly deductible in full in 1949, the year when it was paid.
1Opinion of the Court
Mulroney, Judge:
The respondent determined deficiencies in the petitioner’s income taxes for the years 1953 through 1956 in the respective amounts of $4,077.32, $8,629.46, $3,503.33, and $4,104.34. Concessions by the parties have eliminated some of the issues. The only issue remaining is whether petitioner is entitled to an amortization deduction of $1,905.85 in 1953 and a deduction of $30,489.82 in 1954 of the unamortized balance of a prepayment penalty paid to a mortgagee in 1949, when the loan was refinanced, in order to prepay the existing mortgage.
FINDINGS OF FACT.
Some of the facts have…
2Cases cited7 opinions
- San Joaquin Light & Power Corporation v. McLaughlinCourt of Appeals for the Ninth Circuit · 1933
- General American Life Ins. Co. v. CommissionerUnited States Tax Court · 1956
- Helvering v. California Oregon Power Co.Court of Appeals for the D.C. Circuit · 1935
- Bridgeport Hydraulic Co. v. CommissionerUnited States Tax Court · 1954
- Olinger Mortuary Ass'n v. CommissionerUnited States Board of Tax Appeals · 1931
2 more not listed; retrieve them via the Exa API.
3Cited by11 opinions
- Enoch v. CommissionerUnited States Tax Court · 1972
- John M. Briley and Dorothy D. Briley v. United StatesCourt of Appeals for the Sixth Circuit · 1962
- Phoenix Mut. Life Ins. Co. v. CommissionerUnited States Tax Court · 1991
- Prudential Ins. Co. v. CommissionerUnited States Tax Court · 1988
- Santa Fe Pac. Gold Co. v. Comm'rUnited States Tax Court · 2009
6 more not listed; retrieve them via the Exa API.