TAIYO HAWAII CO. v. COMMISSIONER
United States Tax Court
P, a foreign corporation wholly owned by a foreign conglomerate, was engaged in real estate activity in Hawaii. P borrowed funds from foreign banks and also received advances from its parent and a related foreign corporation. Interest on bank borrowing was paid, and interest on advances from related corporations was accrued and not paid. P reported the interest as deductible.
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P, a foreign corporation wholly owned by a foreign conglomerate, was engaged in real estate activity in Hawaii. P borrowed funds from foreign banks and also received advances from its parent and a related foreign corporation. Interest on bank borrowing was paid, and interest on advances from related corporations was accrued and not paid. P reported the interest as deductible. After an audit examination, respondent determined that the accrued but unpaid interest was subject to the excess interest tax provided for in sec. 884, I.R.C. P, although reporting the advances from related corporations…
1Opinion of the Court
Gerber, Judge:
For the taxable years ended September 30, 1989, 1990, and 1991,1 respondent determined deficiencies in petitioner’s Federal income taxes in the amounts of $35,529, $71,692, and $84,331, respectively. Respondent also determined an $8,433 addition to tax under section 6651(a)(1)2 for 1991.
The issues for our consideration are: (1) Whether petitioner is liable for excess interest tax under section 884(f)(1)(B) for 1989, 1990, and 1991; (2) if petitioner is liable for the excess interest tax, whether certain assets should be included in the taxable base; and (3) whether petitioner is…
2Cases cited43 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Commissioner v. National Alfalfa Dehydrating & Milling Co.Supreme Court of the United States · 1974
- Fin Hay Realty Co. v. United StatesCourt of Appeals for the Third Circuit · 1968
- Ullman v. CommissionerCourt of Appeals for the Second Circuit · 1959
- Pritchett v. CommissionerUnited States Tax Court · 1974
38 more not listed; retrieve them via the Exa API.
3Cited by3 opinions
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- Sparkman v. Comm'rUnited States Tax Court · 2005
- TAIYO HAWAII CO. v. COMMISSIONERUnited States Tax Court · 1997