Pancoast Hotel Co. v. Commissioner
United States Tax Court
1. The holder of petitioner's bonds voluntarily accepted payment of interest at a reduced rate. Held, no taxable income resulted. 2. Petitioner improperly accrued interest as due under an option to purchase property. The accrued interest was deducted from income reported in earlier years. Later when the option was exercised in the taxable year, the vendor voluntarily accepted less than the full amount of interest contracted for.
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1. The holder of petitioner's bonds voluntarily accepted payment of interest at a reduced rate. Held, no taxable income resulted. 2. Petitioner improperly accrued interest as due under an option to purchase property. The accrued interest was deducted from income reported in earlier years. Later when the option was exercised in the taxable year, the vendor voluntarily accepted less than the full amount of interest contracted for. Held, petitioner was not by the previous deduction, with knowledge by the Commissioner of the facts, estopped from denying that the interest reduction resulted in…
1Opinion of the Court
OPINION.
Disney, Judge:
The first question here presented is whether the petitioner realized taxable income by reason of the forgiveness of part of its indebtedness for interest accrued on the general mortgage bonds. The petitioner contends that the cancellation constituted a gift, and that. it. is therefore not to be included in income. If it was not a gift, the petitioner concedes that it-is taxable “at least to the extent of the ‘tax benefit’ which it received in prior years from the accrual and de-deduction of said interest.” The respondent’s position is that there was no gift, and that the…
2Cases cited4 opinions
- Deputy, Administratrix v. Du PontSupreme Court of the United States · 1940
- Helvering v. American Dental Co.Supreme Court of the United States · 1943
- George Hall Corp. v. CommissionerUnited States Tax Court · 1943
- George Hall Corp. v. CommissionerUnited States Tax Court · 1943
3Cited by33 opinions
- Putoma Corp. v. CommissionerUnited States Tax Court · 1976
- Putoma Corp., Successor by Merger of Pro-Mac Company, Petitioners- Cross-Appellants v. Commissioner of Internal Revenue, Cross-AppelleeCourt of Appeals for the Fifth Circuit · 1979
- Winn-Dixie Montgomery, Inc. v. United StatesCourt of Appeals for the Fifth Circuit · 1971
- Commissioner of Internal Revenue v. Mellon. Commissioner of Internal Revenue v. ScaifeCourt of Appeals for the Third Circuit · 1950
- Capital Nat'l Bank v. CommissionerUnited States Tax Court · 1951
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