Leavin v. Commissioner
United States Tax Court
Petitioners purchased at a discount from the issuers certain debentures. The debentures provided for a 6-year maturity. The issuers were in the housebuilding business and intended to redeem the debentures as soon as the specific sections financed thereby were completed and sold. Petitioners herein knew of this intention. No debenture was outstanding for as long as 18 months. The debentures were redeemed at "face."
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Petitioners purchased at a discount from the issuers certain debentures. The debentures provided for a 6-year maturity. The issuers were in the housebuilding business and intended to redeem the debentures as soon as the specific sections financed thereby were completed and sold. Petitioners herein knew of this intention. No debenture was outstanding for as long as 18 months. The debentures were redeemed at "face." Held, petitioners realized ordinary income to the extent of the excess of the amounts realized on redemption over the amounts paid for the debentures.
1Opinion of the Court
Bruce, Judge:
Respondent determined deficiencies in income taxes as follows:
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Petitioners V. David Leavin and Lillian Leavin have conceded respondent’s determination that they overstated certain expenses in 1955 and 1956.
There remains for our consideration, whether gains realized upon the redemption prior to maturity by the issuing corporations of debentures issued at a discount in registered form prior to January 1, 1955, are taxable as ordinary income or capital gains.
FINDINGS OF FACT.
The facts have been fully stipulated. Said stipulation is incorporated herein by this reference.
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2Cases cited11 opinions
- Commissioner of Internal Revenue v. CaulkinsCourt of Appeals for the Sixth Circuit · 1944
- Commissioner of Internal Revenue v. J. I. Morgan and Frances MorganCourt of Appeals for the Ninth Circuit · 1959
- Caulkins v. CommissionerUnited States Tax Court · 1943
- Harry Rosen and Rose Rosen v. United StatesCourt of Appeals for the Third Circuit · 1961
- J. I. Morgan, Inc. v. CommissionerUnited States Tax Court · 1958
6 more not listed; retrieve them via the Exa API.
3Cited by15 opinions
- United States v. Midland-Ross Corp.Supreme Court of the United States · 1965
- Schwartz v. CommissionerUnited States Tax Court · 1963
- Bolnick v. CommissionerUnited States Tax Court · 1965
- Pattiz v. United StatesUnited States Court of Claims · 1963
- Jones v. CommissionerUnited States Tax Court · 1963
10 more not listed; retrieve them via the Exa API.